ANN/THE STAR – The World Bank yesterday forecast Vietnam’s gross domestic product (GDP) growth for this year at 6.1 per cent, but warned that banks’ asset quality remained a concern.
The Southeast Asian country, a regional industrial hub, is targeting 6.5 per cent GDP growth this year on expected external recovery and increased public investment, accelerating from last year’s expansion of 5.05 per cent.
“With continued export growth and signs of a real estate recovery, domestic demand is set to firm up in the second half of 2024 as investor and consumer sentiment improves,” the World Bank said in a report.
However, asset quality has become a significant banking sector concern amid increasing non-performing loans (NPLs) and loan-loss coverage, the World Bank said, as NPLs have grown significantly from 1.9 per cent in 2022 to 4.6 per cent of total loans in 2023.
It said total problem loans could be as high as 7.9 per cent if restructured loans and Vietnam Asset Management Company debts are included.
The World Bank also forecast Vietnam’s headline inflation rate at 4.5 per cent this year, compared with inflation of 3.2 per cent last year, as higher food prices are expected to persist.
