The World Bank on Monday trimmed its forecast for Vietnam’s economic growth on evidence that U.S. tariffs were starting to have an impact on the Southeast Asian exporter’s shipments.
A Reuters report said the World Bank cut its GDP forecast for Vietnam to 6.6% from 6.8% this year, saying activity is expected to moderate over the rest of the year as export growth normalises after a strong first-half performance.
The World Bank’s new forecast is significantly lower than the government’s official target of 8.3%-8.5% growth.
“As an export-oriented economy, Vietnam remains vulnerable to slower global growth and softening demand from major trading partners,” the World Bank said.
“Trade-policy uncertainty may also begin to weigh on business and consumer confidence.”
Vietnam’s biggest export market, the United States, imposed a 20% tariff on its goods from August 7, with transshipments from third countries through Vietnam facing a levy of 40%.
Oxford Economics said on Monday that Vietnam’s goods export values contracted seasonally adjusted 3.6% in August from a month earlier.
Government data on Saturday showed August exports rose 14.5% from a year earlier and were up 2.6% from July, without providing seasonally adjusted data.
“The pace of export growth should continue easing from tariff effects, but electronics should offer some resilience,” Oxford Economics said in a note reported by Reuters.
