In an update of its flagship annual economic publication, Asian Development Outlook (ADO) 2018, ADB forecasts Viet Nam’s economic growth at 6.9% for 2018, slightly lower than 7.1% projected in April as exports, agriculture, construction, and mining are expected to moderate in the second half of the year. ADB retains its 2019 growth forecast for Viet Nam at 6.8%.
Photo: Khac Kien“The economic performance was broad-based, driven by vigorous manufacturing expansion, bumper agriculture production, robust performance of services sector, resilient domestic consumption, and strong investment fueled by FDI and domestic enterprises,” said Mr. Eric Sidgwick, ADB Country Director for Viet Nam.
Economic growth will likely hold up well in the near term buoyed by resilient domestic demand, improved business conditions, and stable macroeconomic environment. Anticipated increase in public capital expenditure in the second half of the year is expected to boost the growth in investment.
Viet Nam’s economy, however, remains vulnerable to external and domestic challenges. Growth moderation in the major economies such as the People’s Republic of China, European Union, and Japan may dampen aggregated demand of global trade. The escalating trade frictions around the world could adversely impact the export performance and FDI inflows to Viet Nam. Inflationary pressure is likely to persist over the near term because of increase in international oil prices and upsurge in food prices. Therefore, ADB has revised Viet Nam’s inflation to 4.0% in 2018 and 4.5% for 2019, up from the April estimates of 3.7% and 4.0%, respectively./.