Vietnam’s economic growth will exceed expectations for 2015 and 2016, with sensible pro-growth monetary and fiscal policies helping to restore macroeconomic stability, and recent policy reforms boosting business confidence, the Asian Development Bank (ADB) said in a report released September 22.
The Asian Development Outlook Update 2015 lifted the ADB’s forecast for Vietnam’s year-on-year gross domestic product growth to 6.5 percent for 2015 and to 6.6 percent for 2016, revising upwards original growth forecasts made earlier this year.
“Vietnam’s improving economic growth performance is being driven by a number of factors, particularly stronger output from manufacturing sector and also rising consumer spending and macroeconomic stability,” said Eric Sidgwick, ADB Country Director for Vietnam.
Manufacturing output growth was particularly strong, increasing by 9.9 percent in the first half of the year as foreign-invested factories boosted the production of goods for export. This growth was likely to continue with foreign direct investment disbursements reaching record levels in the first half of the year. Construction accelerated, with growth of 6.6 percent, owing to a modest recovery in the property market and public investment in infrastructure, the report said.
Exporting goods at Cat Lai Port in HCM City
After a challenging few years, the financial sector appeared to be picking up momentum. Credit growth was set to exceed official targets during 2015, it said. Government policy was aided by lower global commodity prices, which helped to contain price growth, lift disposable incomes and lower business costs.
Vietnam was facing some growing macroeconomic challenges. Slowing economic growth in China, one of Vietnam’s largest trade and investment partners, may dampen trade prospects while continued low global commodity prices will reduce export earnings for key sectors, such as oil and agriculture.
“To mitigate these challenges it will be vital for the country to continue to deepen structural and financial sector reforms, increasing productivity growth and boosting Vietnam’s international competitiveness,” Sidgwick said.
