Vietnam's economy bounced back quickly in the first half of 2024 following a tough period at the end of 2022 and early 2023, thanks to the government's decisive measures, according to Paulo Medas, head of the IMF's 2024 Article IV Mission to Vietnam.

The IMF team conducted the 2024 Article IV consultation with Vietnam between 12-26 June.

In a recent interview with the Vietnam News Agency in Washington D.C., he noted that Vietnam's economy rebounded, growing by 6.4% year-on-year in the first half.

This growth was attributed to strong exports and measures taken by the government and the State Bank of Vietnam, including lowering interest rates and boosting public investment and wages, Vietnam News reports.

Looking ahead to the second half of the year, Medas forecasts the Vietnamese economy will continue recovering, albeit at a slower rate, potentially growing by over 6% for the entire year. 

He added that inflation has increased, reaching approximately 4.3% year-on-year in June, and expects it to remain close to the State Bank of Vietnam's target of 4.5%.

Medas also highlighted several underlying risks, including currency depreciation and rising public wages, which the central bank needs to monitor closely and address with appropriate measures.

To help the country navigate its challenges, he advised Vietnam to balance economic recovery with inflation risk management. He added that the State Bank should closely monitor the situation and be prepared to act if inflation increases significantly.

According to Medas, Vietnam should focus more on medium-term economic growth. The IMF is conducting a detailed study on potential developments in Vietnam's medium-term growth. Over the past 15-20 years, Vietnam's economic performance has been notably strong, outpacing the average growth of emerging markets worldwide.

He also said the country’s population and climate change are significant factors that will affect Vietnam's economic growth in the future.

Furthermore, productivity growth in Vietnam is still lower than in other countries globally. As such, reforms aimed at boosting productivity could help address future demographic challenges, the IMF expert added.