(Illustrative photo: VNA)

It said the projection was based on the strong set of data in the second quarter of 2022 and a historical track record of a generally robust H2 performance.

According to UOB, the sharp rebound in Q2 GDP was driven by manufacturing activities which accelerated for the 4th straight quarter, and a recovery in services output as it continued to regain its footing since the last contraction in the third quarter of last year.

For the first half of 2022, Vietnam’s GDP rose 6.4% year-on-year on the back of a 9.7% gain in the manufacturing sector and 6.6% in services output. Other monthly data released suggest that activities have generally returned to normal after restrictive COVID-19 measures were eased and borders reopened.

The UOB said inflationary pressures on Vietnam are manageable as the main source of impact is energy related while food prices are stable. However, upside risks are significant given the rapid pace of gains in energy prices which will eventually spread to the rest of the economy, especially if higher prices persist.