Viet Nam's Growth Remains Robust Amid External, Domestic Challenges — ADB
HA NOI, VIET NAM (26 September 2018) — Viet Nam’s economy continued to perform strongly in the first half of 2018, although external and domestic challenges could affect the country’s growth outlook for this year and next, says a new Asian Development Bank (ADB) report.
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%.
“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 ADB Country Director for Viet Nam Mr. Eric Sidgwick.
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.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing.