Illustrative photo (Source:Internet)
Hanoi (VNA) - Vietnam is expected to remain one of the fastest growing emerging markets (EMs) as the country’s economy is likely to grow at over 7 percent and above in 2016 and 2017, said Qatar National Bank (QNB) in its latest economic commentary released on March 28.
The commentary from the largest bank in the Persian Gulf region noted that the documents adopted at the 12th National Congress of the Communist Party of Vietnam (CPV) commit to continued reforms aimed at the banking sector, state-owned companies and macroeconomic liberalisation.
As a result, the outlook for Vietnam remains positive, in line with the forecasts published in QNB’s December report for growth of 7 percent in 2016 and 7.5 percent in 2017, said the commentary.
In 2015, Vietnam ’s real GDP growth accelerated to 6.7 percent from 6 percent the previous year, making it one of the fastest growing emerging markets. Vietnam’s outperformance has been driven by strong export growth and supported by a number of other factors.
The report said that Vietnam is attracting strong investment in low-end manufacturing for exports, thanks to competitive wages and free trade deals, such as the agreement on the Trans Pacific Partnership (TPP) and a free trade agreement (FTA) with the European Union (EU).
According to the QNB, foreign direct investment (FDI) is pouring into Vietnam. Also, low-end manufacturing exporters are shifting from China to Vietnam as China shifts to higher-end manufacturing and Vietnam’s wage levels remain lower than in China.
The report showed that FDI has already risen after trade agreements were signed in 2015, but the strongest impetus to growth and exports will come once the TPP comes into force, likely in 2017.
Domestic demand still remains strong. Incomes could be boosted by the strong export sector, while the housing market is showing signs of recovery. All of these may bolster investment and consumer sentiment, said the report.-VNA
