World Economy

Int’l Observers Update Vietnam Growth Forecasts

Int’l Observers Update Vietnam Growth ForecastsInt’l Observers Update Vietnam Growth Forecasts

International organizations are continuing to show optimistic forecasts about Vietnam’s whole-year growth, with the country remaining one of the region’s top performers thanks to strong production recovery.

Sebastian Eckardt, the World Bank’s lead economist for Vietnam, told Vietnam News Agency that Vietnam’s significantly-improved economic activities—especially the year-on-year growth rate of 7.46% in the third quarter—are expected to enable the economy to grow 6.7% for the entire year, which exceeds the institution’s projection of 6.3%.

The Asian Development Bank also said that the outlook for Vietnam remains bright thanks to strong production recovery, and continued buoyancy in foreign direct investment inflows, which would add impetus to growth in the coming months.

The economy grew by a 10-year record 7.46% in this year’s third quarter—up from 6.28% in the second quarter and 5.15% in the first quarter. This growth trend is ascribed to a recovery of local production.

In this year’s first nine months, the processing and manufacturing sector, which contribute to 80% of the industrial sector’s growth, expanded 12.8%, the highest rise over the past many years, contributing to 9% of the economy’s nine-month growth, according to the General Statics Office.

Standard Chartered is also forecasting quite a bright outlook for Vietnam. “We raise our GDP growth forecast for both 2017 and 2018 to 6.8% (versus prior forecasts of 6.4 and 6.6% in 2017 and 2018, respectively), driven by faster electronics manufacturing growth in 2017’s second half.

This would make Vietnam the fastest-growing ASEAN-6 economy in 2017, likely overtaking the Philippines,” said Chidu Narayanan, economist for Standard Chartered’s in Asia.

“We expect the manufacturing sector to grow at a faster pace in the fourth quarter, buoyed by robust electronics manufacturing activity. Stronger manufacturing growth should push overall growth higher in the year’s second half to 7.6% year-on-year, taking full-year GDP growth to 6.8%,” Narayanan added.

In this year’s first nine months, Vietnam earned $49.5 billion from exporting electronics items, accounting for 32.14% of the country’s total export turnover. The figure, largely driven by Samsung, is expected to come to $53 billion this year, accounting for nearly 26% of the country’s total export turnover.

For its part, HSBC last week stated in a Vietnam update, “Vietnam has soared above our expectations. Vietnam is now tracking ahead of our full-year growth expectations and the Bloomberg consensus of 6.3%. And with leading indicators still robust, we now revise our growth forecast to reach 6.6% by year-end,” said HSBC economist Noelan Arbis.

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