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Vietnam Today

ADB puts 2019 growth at 6.8%

Released at: 17:01, 03/04/2019

ADB puts 2019 growth at 6.8%

Photo: Viet Tuan

Asian Development Outlook (ADO) 2019 report also forecasts 2020 growth of 6.7%.

by Linh San

Vietnam’s economy experienced another year of strong growth in 2018, although a weaker external environment could affect the country’s growth outlook for this year and next, according to a new Asian Development Bank (ADB) report released on April 3. In its flagship annual economic publication, Asian Development Outlook (ADO) 2019, the ADB forecasts Vietnam’s economy will grow 6.8 per cent this year and 6.7 per cent in 2020.

“Economic performance in Vietnam reached a sweet spot in 2018, driven by strong exports and domestic demand,” said ADB Country Director for Vietnam, Mr. Eric Sidgwick. “Economic growth will likely hold up well in the near term, supported by export-oriented manufacturing, FDI, and sustained domestic demand. Growth momentum is expected to continue, thanks to ongoing reforms to improve the business environment and encourage private investment.”

Growth will continue to be broad-based, underpinned by robust private consumption, the continued expansion of manufacturing, services, and agriculture, and greater market access for Vietnam’s exports through various free trade agreements, including the recently ratified Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Inflation is expected to average 3.5 per cent in 2019 and 3.8 per cent in 2020.

However, ADB also forecasts that risks remain. “The world’s major economies, Vietnam’s key trading partners, are weakening,” according to the report. “Vietnam is one of the most trade-dependent countries in the region, with trade volume reaching twice the size of its GDP. Domestically, lackluster progress in State-owned enterprise reform could be a drag on growth.”

The report underlines the importance for Vietnam of strengthening private enterprises’ integration in global value chains (GVCs), which is a key policy challenge for Vietnam’s long-term growth. Improving small- and medium-sized enterprises’ (SMEs) access to finance and enhancing their capability, including workplace skills, is among important measures to enable them to better adopt new technologies and have more value addition in GVCs.

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