Manufacturing and construction are likely to remain the fastest-growing sectors (Photo: VNA) HCM City (VNA) – Standard CharteredBank expects Vietnam’s rapid growth of 7 percent year-on-year in 2018, higherthan its previous forecast of 6.8 percent, with all domestic engines firingtogether.
Manufacturing and construction are likely toremain the fastest-growing sectors.
The forecast is highlighted in the bank’srecently published Global Focus report for the third quarter of 2018 entitled“Fattening tail risks”.
“We are positive on Vietnam’s growth medium-termon strong manufacturing activity as FDI inflows to manufacturing remain strong.We believe that Vietnam will remain one of the fastest growing economies inAsia in 2018,” said Chidu Naryanan, Economist, Asia, Standard Chartered Bank.
According to the latest macro-economic researchreport, FDI inflows are set to remain high in 2018, led by manufacturing whichmakes up close to 50 percent of inflows.
Disbursed FDI rose to 6.75 billion USD in January-May, higher than the year-agoperiod.
The bank expects both registered and implementedFDI to be close to 15 billion USD in 2018, unchanged from the previousforecast.
Standard Chartered economists also forecast amild trade surplus for the rest of the year on strong export growth and slowingimport growth.
Electronics exports are likely to remain robustin 2018 on strong demand for components, particularly OLED displays used inmobile devices, and expected to grow by over 20 percent in 2018.
The report also suggeststhat the State Bank of Vietnam (SBV) is likely to remain accommodative in thenear term to support growth, despite rate hikes from major central banks.
Standard Chartered Bank expects unchanged policyrates in 2018 and a mild devaluation of the Vietnamese currency, the dong(VND).
Specifically, the bank anticipates a mild movehigher in USD/VND rate in the quarters ahead and revised up its USD/VND rateforecasts to 22,950 for the end of the third quarter 2018 and 23,000 for theyear’s end.-VNA
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