A report from Vietnam’s Institute for Economic and Policy Research–which goes by the acronym VEPR–has found that Vietnam is unlikely to reach its GDP growth target of 6.5 percent by the end of the year. The institute’s Vietnam Annual Economic Report 2024 has instead found that GDP growth is likely to come in around 5.85 percent. A contraction of the public sector, weak consumer demand at home and abroad, and an increased risk of rising interest rates, are all weighing on GDP growth, according to the report.

This is in line with the growth outlooks of Maybank Securities and the International Monetary Fund which both forecast GDP growth of 5.8 percent back in April. The Asian Development Bank, however, has been slightly more optimistic forecasting 6 percent and Singapore’s United Overseas Bank has been even more so, forecasting 6.4 percent growth for Vietnam this year.

Last year, Vietnam’s GDP growth target was set 6.5 percent too, however, according to government figures, it rounded out the year at just 5.05 percent. This was in large part the result of a broad global economic downturn around the world that saw consumers tighten their belts and reduce spending on the kind of goods that have become central to Vietnam’s manufacturing industry and, subsequently, exports.

This year, though exports have picked up–up 14.2 percent in the first five months of this year over 2023–many of the other challenges Vietnam’s economy faced last year have not disappeared. In particular, the currency has been somewhat volatile, credit growth has remained well below target, and the real estate sector’s recovery after a tumultuous two years, still remains relatively tepid.

See also: Vietnam’s Real Estate Market Recovery 2024: Unpacked