Asia Pacific Economic Research03 January 2024J P M O R G A Nwww.jpmorganmarkets.comEmerging Markets Asia, Economic and Policy ResearchJisun Yang(822) 758-5512jisun.yang@jpmorgan.comJPMorgan Chase Bank, N.A., Seoul BranchJin Tik Ngai, CFA(65) 6807 5556jintik.ngai@jpmorgan.comJPMorgan Chase Bank, N.A., Singapore BranchVietnam�s real GDP grew 6.8%oya and 11.2%q/q, saar, in 4Q23, marking the third consecutive quarter of strong growth. This followed a recovery of 8.9%q/q, saar, in 2Q and 11.1% in 3Q after a contraction in 1Q. The strength in 4Q was broad-based, with industrial and services production increasing by 15.0% and 11.5%, respectively.•Strong exports buoyed the manufacturing sector. Real exports reversed their year-to-date growth to positive 8.7% in 4Q after remaining negative until 3Q, stronger than customs exports (-4.4%oya, ytd) implied. Both tech and non-tech exports showed robust growth in 4Q. The former was supported by the regional tech upswing in 2H, while the latter gained momentum in 4Q, with external resilience lasting longer than anticipated, especially in the US (a key export destination). In the near term, we anticipate that real exports in GDP might see some corrections. However, the global demand slowdown is projected to be gradual (with the likelihood of a soft landing increasing after the Fed�s dovish pivot), making it unlikely to disrupt Vietnam's trend-like growth this year.•The domestic-oriented services sector expanded by 11.5%q/q, saar, in 4Q, following strong growth of 9.7% in 2Q and 12.7% in 3Q. This accompanied larger positive contributions of consumption and investment to overall growth in 4Q from a quarter ago. While we thought that domestic demand growth would moderate after mid-year surges that had been boosted by post-pandemic dynamics and monetary policy easing, it extended its robust expansion into 4Q. Investment growth accelerated in 4Q despite a quarterly correction in the construction sector, as strong exports might have fueled facility investment. Looking forward, we anticipate that services should gradually revert to a trend-like mid-single-digit pace, after three consecutive quarters of 10-13%ar growth. The nearly flat growth in retail sales in December, down from 23.3% 3m/3m, saar, in September, broadly aligns with this view.GDP growth maintained resilience in 4Q, longer than we had expected, both externally and domestically. That said, the details largely conformed to our expectation for normalization from the recent above-par sequential growth. Reflecting the 4Q outturns (5.0%y/y for full-year 2023 vs. JPMe 4.4%), we have revised up our 2024 growth forecast from 5.9% to 6.2%. With the caveat of high uncertainty in global growth assumptions, the regained domestic stability—after noise from the pandemic and local liquidity issues—supports our outlook for trend-like growth.On the inflation front, oil and f...
