Illustrative photo (Source: VNA)

Hanoi (VNA) – The Asian Development Bank (ADB) has projected Vietnam will grow 6.9 percent this year, lower than its previous forecast of 7.1 percent made in April.

The bank attributed the lower forecast growth rate to expectations that local exports, agriculture, construction, and mining will moderate in the second half of the year.

The bank, meanwhile, retains the 2019 growth forecast for Vietnam at 6.8 percent.

According to ADB’s recent press release, Vietnam’s economic growth is likely to hold up well in the near term thanked to resilient domestic demand, improved business conditions, and stable macroeconomic environment. An anticipated increase in public capital expenditure in the second half of the year is expected to boost investment growth.

The economy, however, remains vulnerable to external and domestic challenges. Growth moderation in the major economies such as 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 Vietnam. Inflationary pressure is likely to persist over the near term because of an increase in international oil prices and an upsurge in food prices.

As such, ADB has revised forecast for local inflation rate to 4.0 percent in 2018 and 4.5 percent in 2019, up from the April estimates of 3.7 percent and 4.0 percent, respectively.-VNA