Scene at the press conference (Photo: VNA) Hanoi (VNA) — The Vietnamese economy continuedits strong performance in the first half of 2018, although external anddomestic challenges could affect the country’s growth outlook for this year andnext year, the Asian Development Bank (ADB) said in a new report.
The ADB released an update of its flagship annual economicpublication, Asian Development Outlook (ADO) 2018, at a press conference inHanoi on September 26.
Vietnam maintained a 7.1 percent growth in the first half of2018, compared to 5.8 percent in the same period last year. During the period,rising income lifted private consumption growth to 7.2 percent from 7.0 percenta year earlier. Private investment remained robust, supported by high creditgrowth and strong foreign direct investment. The volume of goods and services exportsrose by 15.7 percent from the 14.4 percent recorded last year. Strength inexports, domestic private consumption, and investment offset deceleration ingovernment consumption and public investment that resulted from fiscalconsolidation.
Most major sectors continued to perform solidly. Output fromagriculture and allied activities grew by 3.9 percent, compared to 2.7 percentlast year. Industrial production expanded by 9.3 percent, sharply higher than 2017first half’s 5.4 percent expansion. Acceleration in industry offset moderationin construction, as measures took hold to curb bank lending to real estate.
Driven partly by a hefty rise in international touristarrivals, the service sector posted nearly 7.0 percent growth, the same pace aslast year.
ADB forecasts Vietnam will grow 6.9 percent this year,slightly lower than the 7.1 percent projected in April, as local exports,agriculture, construction, and mining are expected to moderate in the secondhalf of the year. It retains the 2019 growth forecast for Vietnam at 6.8percent.
ADB Country Director for Vietnam Eric Sidgwick (R) answers reporters' questions at the press conference (Photo: VNA) “The economic performance was broad-based, driven byvigorous manufacturing expansion, bumper agriculture production, robustperformance of services sector, resilient domestic consumption, and stronginvestment fueled by FDI and domestic enterprises,” said ADB Country Directorfor Vietnam Eric Sidgwick.
Vietnam’s economic growth is likely to hold up well in thenear term thanked to resilient domestic demand, improved business conditions,and stable macroeconomic environment. An anticipated increase in public capitalexpenditure in the second half of the year is expected to boost investmentgrowth.
The economy, however, remains vulnerable to external anddomestic challenges. Growth moderation in the major economies such as China,European Union, and Japan may dampen aggregated demand of global trade. Theescalating trade frictions around the world could adversely impact the exportperformance and FDI inflows to Vietnam. Inflationary pressure is likely topersist over the near term because of an increase in international oil pricesand an upsurge in food prices.
Therefore, ADB has revised forecast for local inflation rateto 4.0 percent in 2018 and 4.5 percent in 2019, up from the April estimates of3.7 percent and 4.0 percent, respectively.-VNA
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