Vietnam’s economy sees bright colours

Thursday, 2019-10-10 12:12:47
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The manufacturing sector plays as the key pillar for the general growth of the Vietnamese industry and economy. (Illustrative image)
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NDO – The Vietnamese economy is forecast to continue its healthy growth thanks to increasing domestic demand and inflows of foreign direct investment (FDI).

According to the latest report on the economic update of the Southeast Asia region released by the Institute of Chartered Accountants in England and Wales (ICAEW), Vietnam’s economy is forecast to grow by 6.7% in 2019, outperforming the rest of the region.

In addition, Vietnam will continue to benefit from positive trade diversion effects, strength in domestic demand and sustained FDI inflows.

Meanwhile, according to statistics from the General Statistics Office (GSO), the Vietnamese economy expanded by 6.98% in the first nine months of this year, with the industry and market service being the main driver of the economy. This is the highest nine-month growth rate in the past nine years. The manufacturing and processing sector plays as the key pillar for the general growth of the Vietnamese industry and economy with a growth of 11.37% in the nine-month period.

6.8% growth target is reachable

The positive growth of the economy is also seen through impressive export figures. The country posted an export revenue of US$71.76 billion in the third quarter of 2019, up 10% compared to the same period in 2018 and up 12.7% compared to the second quarter of this year. The country’s export revenue reached US$194.3 billion in January-September period, an increase of 8.2% compared to the same period in 2018.

GSO General Director Nguyen Bich Lam said that based on the results achieved in the first nine months of this year, the economic growth target of 6.8% for entirety of 2019 is reachable. This is of great significance to the successful implementation of the socio-economic development plan for the 2016-2020 period.

“The specific target in the five-year plan is an average GDP growth of 6.5%-7% for the 2016-2020 period. At this time, the average GDP growth in the 2016-2018 period was 6.7%. If the economic growth in 2019 reaches the highest target set by the National Assembly of 6.8%, the economic growth in the 2016-2019 period will be 6.73%, making an important contribution to realising the growth plan set out for the 2016-2020 period”, Lam said.

Asian Development Bank (ADB) Country Director for Vietnam Eric Sidgwick said that Vietnam’s disbursement of FDI capital was estimated to reach US$9.1 billion in the first half of 2019, up 8.1% compared to the same period last year and equivalent to 8.4% of the GDP.

In addition, foreign indirect investment in Vietnam in the first half of this year nearly doubled that of the same period last year to hit US$8.1 billion, reflecting the improvement in the confidence of enterprises.

Domestic demand is the driver for growth

“Despite a slowdown in export growth due to the escalation of the trade conflict between the United States and China and the consequent downturn in global trade, the economy remains healthy thanks to the continued strength in domestic demand and sustained inflows of foreign direct investment. Prospects for domestic consumption continue to be positive, supported by rising incomes, buoyant employment, and moderate inflation,” said the ADB Country Director for Vietnam.

He also stated that the signing of the EU-Vietnam free trade agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership will help further open market access for trade and investment. In addition, Vietnam’s recent amendment to the Public Investment Law is expected to improve public investment by accelerating processes, simplifying procedures, and enabling faster disbursement of public investment.

Economist Le Dang Doanh said that despite the many difficulties due to the impacts of the world politic situation and the harshness of climate change, Vietnam's economy can achieve the growth rate of 6.8% in 2019 and up to 7% in the near future.

“The Vietnamese economy is currently growing strongly thanks to the signing of several free trade agreements. These are deals that open the door to Vietnamese goods to enter large markets without taxes. Therefore, we have the opportunity to boost inherent advantages and increase competitiveness towards promoting exports to large markets. If the private sector grows and creates links with foreign-invested enterprises, the national economy will continue to develop more sustainably in the future,” Doanh affirmed.

Source: VOV