Workers process metal moulds at the SaiGon Industry Corporation in HCM City (Photo: VNA) Hanoi (VNA) - The WorldBank (WB) released its Global Economic Prospects report on June 4, forecastinga global 2017 economic growth rate of 2.7 percent and a Vietnamese growth rateof 6.3 percent, lower than the 6.7 percent goal set by the government.
In Vietnam, strong exports are projected to help growth sustain itself atslightly below 6.5 percent this year, according to WB’s report.
For Vietnam and other countries in the Asia Pacific region, commodity importgrowth remains generally robust. Therefore, solid domestic demand, stronginfrastructure spending and FDI-led investment in manufacturing sectors andservices will continue to benefit the country.
After a period of financial market volatility in late 2016, global financeconditions have improved in 2017. Although real credit growth generallymoderated on tighter regulations and higher inflation, it remained high in Vietnamand China.
The withdrawal of the United States from the Trans Pacific Partnership (TPP),however, could potentially withhold significant growth opportunities fromVietnam. Changing trade policies would also affect certain economies in theAsia Pacific region, namely those with sizable exports to developed economiessuch as Vietnam, Cambodia, China, Malaysia and Thailand.
As manufacturing and trade pick up, market confidence rises, and commodityprices stabilise, advanced economies’ growth will accelerate to 1.9 percent in2017, which also will benefit developed countries’ trading partners. Meanwhile,emerging markets’ and developing economies’ growth will increase to 4.1 percentthis year from 2016 number of 3.5 percent.
“With a fragile but real recovery now underway, countries should seize thismoment to undertake institutional and market reforms that can attract privateinvestment to help sustain growth in the long term. Countries must alsocontinue to invest in people and build resilience against overlappingchallenges, including climate change, conflict, forced displacement, famine anddisease,” said Jim Yong Kim, World Bank Group President.
In late March, the General Statistics Office of Vietnam announced that thecountry’s first quarter GDP growth was 5.1 percent from the same period in2016. This slow growth is attributed to the manufacturing sector’sunderperformance. As such, the low percentage of this year’s first quartermeans a potential challenge to the National Assembly’s goal of a 6.7 percentGDP growth rate by the end of 2017.
Nonetheless, Vietnam Institute for Economic and Policy Research predicts thatwith a gradual increase in each quarter’s GDP growth rate, the goal is stillattainable.-VNA
VNA
