A factory in the Du Long Industrial Park in Thuan Bac district, Ninh Thuan province. - Illustrative image (Photo: VNA)

Han Teng Chua, an economist at DBS Bank Ltd, said  Vietnam’s economy is recovering, adding that foreign direct investment is likely to remain forthcoming, with Vietnam staying attractive over the coming years, as companies diversify and de-risk their supply chains by expanding into Vietnam.

Competitive wage costs, a wide network of trade agreements and supportive business environment are key advantages for the Vietnamese economy, he stated.

The website Bloomberg.com of the US has cited analysts' opinions, saying that the State Bank of Vietnam (SBV), among the first in Asia to lower borrowing costs in 2023, will likely keep its benchmark interest rate steady through next year as it tackles economic growth and inflation concerns.

Bloomberg’s latest survey shows that the refinancing interest rate, currently at 4.5%, is seen to stay on hold through 2025, in the backdrop of a rebound in GDP growth backed by strong exports. The rate was cut thrice between April and June last year to 4.5% from a peak of 6%.

In a previous survey, economists had expected a further 50 basis points of cuts during the current January-March period.

Analysts also raised their headline inflation forecasts for 2024, now expecting price gains at 3.6% this quarter and at 4.05% in the next, up 0.7% and 0.75 % compared to the same periods last year, respectively.

They expect the annual inflation to average a faster 3.5% this year from 3% earlier, before easing to 3.2% in 2025. The 2024 level is still below the government’s targeted range of 4%-4.5%.