Manufacturing and agriculture are likely to remain the primary growth drivers in the second half of the year (Photo: VNA) Hanoi (VNS/VNA) -Standard Chartered Bank continues to expect Vietnam’s robust gross domesticproduct (GDP) growth of 7 percent in 2018, driven by strong FDI-supportedelectronics manufacturing and rising consumption.
Manufacturing and agriculture arelikely to remain the primary growth drivers in the second half of the year.
The forecast is highlighted inthe bank’s recently published Global Research report on Vietnam entitled “Vietnam– Fast, not furious, growth”.
Chidu Narayanan, Economist, Asia,Standard Chartered Bank, said: “Vietnam expanded 7.1 percent in first half ofthe year, moderating mildly in the second quarter after a record 7.4 percentgrowth year-on-year in the first quarter, in line with our forecast. This isthe first year since the global financial crisis that the second quarter growthhas been slower than the first one; we believe this is a sign of a focus onsustainable growth over the medium term. We expect the second half of the yeargrowth to remain robust, albeit mildly slower than in the first six months of theyear.”
“Vietnam is likely to remain thefastest-growing ASEAN economy in 2018 and 2019, as in 2017. We remain positiveon Vietnam’s medium term growth on strong manufacturing activity, as FDIinflows to electronics manufacturing remain strong.”
According to the latestmacro-economic research report, manufacturing is projected to record anotheryear of double-digit growth and agriculture growth will continue its recoveryin the second half of the year, even as construction slows down on more modestgrowth in the real-estate sector. At the same time, electronics export growthis likely to stay robust, albeit lower than in 2017, leading to a trade surplusand supporting overall growth. The bank maintains its views that FDI inflowswill stay strong in 2018 and 2019-2020, with registered capital of close to 17billion USD each year, and FDI inflows to the manufacturing sector,particularly electronics manufacturing, will remain high in the medium term.
The study also expects steadygrowth in services to support overall growth in 2018, led by strong domestictrading activity. The services sector, which makes up close to 40 percent ofthe economy, is likely to remain robust in the second half of the year afterrising by a steady 7 percent year-on-year in the first six months of the year.The rise of the business process outsourcing (BPO) sector, aided by a young,well-educated, low-cost labour force, should support services sector growth inthe medium term.
On the foreign exchange outlook,Standard Chartered economists raise their USD-VND forecasts to 23,400 byend-2018 and expect a small VND depreciation in early 2019, beforeending 2019 mildly stronger against the USD as positive domestic and externalfactors support the currency.-VNA/VNS
Manufacturing and agriculture arelikely to remain the primary growth drivers in the second half of the year.
The forecast is highlighted inthe bank’s recently published Global Research report on Vietnam entitled “Vietnam– Fast, not furious, growth”.
Chidu Narayanan, Economist, Asia,Standard Chartered Bank, said: “Vietnam expanded 7.1 percent in first half ofthe year, moderating mildly in the second quarter after a record 7.4 percentgrowth year-on-year in the first quarter, in line with our forecast. This isthe first year since the global financial crisis that the second quarter growthhas been slower than the first one; we believe this is a sign of a focus onsustainable growth over the medium term. We expect the second half of the yeargrowth to remain robust, albeit mildly slower than in the first six months of theyear.”
“Vietnam is likely to remain thefastest-growing ASEAN economy in 2018 and 2019, as in 2017. We remain positiveon Vietnam’s medium term growth on strong manufacturing activity, as FDIinflows to electronics manufacturing remain strong.”
According to the latestmacro-economic research report, manufacturing is projected to record anotheryear of double-digit growth and agriculture growth will continue its recoveryin the second half of the year, even as construction slows down on more modestgrowth in the real-estate sector. At the same time, electronics export growthis likely to stay robust, albeit lower than in 2017, leading to a trade surplusand supporting overall growth. The bank maintains its views that FDI inflowswill stay strong in 2018 and 2019-2020, with registered capital of close to 17billion USD each year, and FDI inflows to the manufacturing sector,particularly electronics manufacturing, will remain high in the medium term.
The study also expects steadygrowth in services to support overall growth in 2018, led by strong domestictrading activity. The services sector, which makes up close to 40 percent ofthe economy, is likely to remain robust in the second half of the year afterrising by a steady 7 percent year-on-year in the first six months of the year.The rise of the business process outsourcing (BPO) sector, aided by a young,well-educated, low-cost labour force, should support services sector growth inthe medium term.
On the foreign exchange outlook,Standard Chartered economists raise their USD-VND forecasts to 23,400 byend-2018 and expect a small VND depreciation in early 2019, beforeending 2019 mildly stronger against the USD as positive domestic and externalfactors support the currency.-VNA/VNS
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