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Vietnam growth to slow to 6.5% in 2025, lose pace further in 2026: IMF
																								
												
												
											
Economic growth is projected to slow to 6.5 per cent in 2025 and decelerate further in 2026 given the full year effect of the new US tariffs (announced in July) and unwinding of most of the one-off 2025 government stimulus, it noted.
There is room for greater fiscal support if economic growth slows down markedly, while space for monetary easing is limited. Allowing more flexibility in the exchange rate and strengthening the resilience of the financial sector will be important, the IMF said after recently concluding its Article IV consultation with the country.
Though Vietnam’s economy rebounded strongly in 2024 and early 2025, the outlook is constrained by high global uncertainty on trade and economic policies, the IMF said.
Growth may slow to 6.5 per cent in 2025 and lose pace in 2026, it noted.
Downside risks are high.
A further escalation in global trade tensions or a tightening of global financial conditions could weaken further exports and investment.
Implementation of the ambitious reform agenda and infrastructure improvements presents an opportunity to raise medium-term growth and reduce external vulnerabilities, it noted.
Inflation in the country accelerated somewhat in recent months, reaching 3.6 per cent year on year (YoY) in June, but remains below the target. The current account surplus reached a record 6.6 per cent of gross domestic product (GDP) in 2024.
Downside risks are high. A further escalation in global trade tensions or a tightening of global financial conditions could weaken further exports and investment.
Domestically, financial stress could re-emerge from tighter financial conditions and high corporate indebtedness, the IMF observed.
On the upside, successfully implementing infrastructure projects and structural reforms could significantly boost medium-term growth. If global trade tensions subside, the economic outlook would improve, it added.
Fibre2Fashion News Desk (DS)
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FDI into Bangladesh up 19.13% within 1 year after Jul 2024 uprising
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Global FDI dips 3% in H1 2025 amid weak investor sentiment: UNCTAD
														
The drop was driven by developed economies, where cross-border mergers and acquisitions (M&As)—which normally make up a large share of their FDI—fell 18 per cent to $173 billion, UNCTAD said in its latest Global Investment Trends Monitor.
Global FDI declined 3 per cent in H1 2025, marking a continued two-year slump as trade tensions, high borrowing costs, and geopolitical uncertainty curbed investor confidence, according to UNCTAD. 
Developed economies saw an 18 per cent fall in M&As. 
Greenfield and renewable projects dropped sharply, though AI-driven investments and sovereign wealth fund activity may aid recovery later in 2025. 
Developing economies fared better overall, with flows remaining flat, though trends diverged by region. Inflows rose 12 per cent in Latin America and the Caribbean, 7 per cent in developing countries in Asia but fell 42 per cent in Africa.
High borrowing costs and economic uncertainty continued to squeeze investment in industry and infrastructure in H1 2025. Announcements of greenfield projects—when firms build new operations abroad—fell 17 per cent in number, driven by a 29 per cent decline in supply-chain-intensive manufacturing such as textiles, electronics, and automotives amid tariff uncertainty.
The international project finance—critical for infrastructure development—also declined, with deal numbers down 11 per cent and value 8 per cent. The trend was more positive in developing economies, where project finance deals fell only 2 per cent after two years of sharp declines. Despite fewer deals, the total value jumped 21 per cent, lifted by a few large-scale projects in Panama, the United Arab Emirates, and Uzbekistan. A broad recovery has yet to emerge.
Despite fewer projects, the value of global greenfield investment rose 7 per cent, lifted by major projects in artificial intelligence (AI) and the digital economy. For example, the United States recorded $237 billion in new greenfield projects in H1 2025—nearly matching the 2024 total and four times the past decade’s half-year average. More than half of the value came from AI-related sectors, particularly semiconductors (~$103 billion) and data centres (~$27 billion).
Investment in sectors critical to the Sustainable Development Goals (SDGs) continued to fall in early 2025. SDG-related investment projects in developing countries were down 10 per cent in number and 7 per cent in value, following steep declines last year. Projects in least developed countries (LDCs) are on track to fall another 5 per cent in 2025, possibly hitting their lowest level since 2015.
Internationally financed projects—including those in transport and utilities—remained about 25 per cent below the decade average. In LDCs, project finance in infrastructure fell another 85 per cent in value. Greenfield infrastructure activity declined 31 per cent in value and 25 per cent in number, led by sharp contractions in Latin America and the Caribbean (–78 per cent in value and –43 per cent in number).
Renewable energy investment, the largest SDG-relevant sector, also weakened. Globally, international project finance in the sector—which has accounted for nearly two-thirds of global totals in recent years—fell another 9 per cent in number and 10 per cent in value.
Global greenfield projects in renewable energy also declined 55 per cent in number and 21 per cent in value. In developing economies, projects fell 23 per cent. In LDCs, they declined by 31 per cent in number and 18 per cent in value.
Investment in water and sanitation fell 40 per cent, with no new projects in Africa or LDCs and a 97 per cent decrease in Latin America and the Caribbean. Only agrifood systems and health showed positive trends in developing economies, with investment holding steady in agrifood and rising 37 per cent in health, driven primarily by new projects in Asia.
The global investment climate will remain challenging through the rest of 2025. Geopolitical tensions, regional conflicts, economic fragmentation, and efforts to de-risk supply chains continue to weigh on flows. Still, easing financial conditions, rising M&A activity in the third quarter, and higher overseas spending by sovereign wealth funds could support a modest rebound by year-end.
Fibre2Fashion News Desk (SG)
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Make rate structure more market-oriented, IMF tells Bangladesh Bank
														
During a meeting with Bangladesh Bank officials last week, the IMF stressed the need to maintain a contractionary monetary policy to bring inflation down to 5 per cent.
Bangladesh’s economy is still facing significant pressure, the IMF said, advising the country’s central bank to make the interest rate structure more market-oriented.
It stressed the need to maintain a contractionary monetary policy to bring inflation down to 5 per cent.
It is concerned over the use of foreign reserves in forming the Export Development Fund and the growing volume of non-performing loans.
It also expressed concern over the use of foreign reserves in forming the Export Development Fund (EDF) and the growing volume of non-performing loans (NPLs).
Despite a requirement under the loan conditions to reduce bad loans in state-owned banks below 10 per cent, the figure has reportedly exceeded 40 per cent. Private banks also saw their NPL ratio surpass 10 per cent, double the stipulated 5 per cent limit.
Under the IMF’s $4.7 billion loan programme, Bangladesh has yet to fully achieve its inflation-control target.
The central bank informed the visiting IMF delegation that overall inflation had dropped to 8.36 per cent in September.
The IMF sought clarification on how the central bank plans to maintain investment momentum if the contractionary policy continues for an extended period, according to domestic media reports.
The delegation strongly objected to the bank’s practice of providing unsecured liquidity support to weak banks under its ‘lender of last resort’ policy.
It was satisfied with the current level of Bangladesh’s foreign exchange reserves.
The IMF mission will stay in Dhaka until November 13.
Fibre2Fashion News Desk (DS)
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