Key View
- We have revised upwards our 2023 current account surplus forecast for Vietnam from 0.5% of GDP to 1.5%. In 2024, we expect the surplus to widen further to 2.0% of GDP.
- The near-term export outlook remains tepid, but we think that a recovery will materialise in H224 alongside a rebound in global demand, especially the US.
- Meanwhile, a weak domestic economy will improve the trade balance, as sluggish underlying demand will keep a lid on imports.
Vietnam’s current account surplus widened substantially from 4.4% of GDP in Q1 2023 to a three-year high of 7.6% in Q2. The picture is similar even after we smooth out the quarterly volatility: summed across four quarters, the data show the surplus widening from 1.1% to 4.3%. These figures are all larger than we had anticipated. We are consequently revising upwards our 2023 forecast from 0.5% of GDP to 1.5 % of GDP, and expect the surplus to widen further to 2.0% of GDP in 2024 (see chart below).
