Vietnam’s economy continued to perform strongly in the first half of 2018, although external and domestic challenges could affect the country’s growth outlook for this year and next, says a new Asian Development Bank (ADB) report.
Eric Sidgwick, ADB Country Director for Vietnam announces the Asian Development Outlook 2018 update on September 26
“The economic performance was broad-based, driven by vigorous manufacturing expansion, bumper agriculture production, robust performance of services sector, resilient domestic consumption, and strong investment fuelled by FDI and domestic enterprises,” said Eric Sidgwick, ADB Country Director for Vietnam.
Economic growth will likely hold up well in the near term buoyed by resilient domestic demand, improved business conditions, and a stable macroeconomic environment. Anticipated increases in public capital expenditure in the second half of the year are expected to boost the growth in investment.
Vietnam’s economy, however, remains vulnerable to external and domestic challenges. Growth moderation in the major economies such as the People’s Republic of China, European Union, and Japan may dampen aggregated global trade demand. The escalating trade friction around the world could adversely impact the export performance and FDI inflows to Vietnam. Inflationary pressure is likely to persist over the near term because of increase in international oil prices and upsurge in food prices. Therefore, ADB has revised Vietnam’s inflation to 4.0% in 2018 and 4.5% for 2019, up from the April estimates of 3.7% and 4.0%, respectively.
