Unloading goods at Cai Mep-Thi Vai Po in Ba Ria-Vung Tau Province (Photo: Trong Duc/ VNA)

UOB has maintained Vietnam’s GDP growth forecast at 6.5% and inflation at 3.7% for this year, although it anticipates inflation would rise to 5% ahead in 2023.

Its latest report, the bank notes the manufacturing sector continued to record strong growth at 9.24% in the first five months of the year in comparison to 8.28% recorded in in the initial four months.

This performance is also reflected in the purchasing managers’ index (PMI) which was in its eighth month of expansion in May.

Furthermore, foreign direct investment (FDI) inflows into Vietnam rebounded in May despite enduring a period of instability due to the Russia-Ukraine conflict coupled with rising commodity prices.

According to UOB, the consumer side has seen several positives over recent months due to the lifting of domestic COVID-19 restrictions and the reopening of cross border travel, both of which have injected fresh life into the services sector after a period of stagnation.

The bank expects tourism dependent sectors such as accommodation and food to return to growth ahead in the second quarter following nine straight quarters of decline.