Viet Nam Human Rights
ADB: Vietnam’s economy stablises in 2018
24/4/18
The
Vietnamese economy will rise to 7.1% this year, before easing back to 6.8% in
2019, said the Asian Development Bank (ADB) in a new report launched on April
11.
“Aided
by able macroeconomic management, economic growth will spurt in 2018, with
Vietnam becoming one of the strongest performers in the region”, said ADB
Country Director for Vietnam Eric Sidgwick.
Vietnam’s
robust economic growth will be driven by vigorous manufacturing and export
expansion, rising domestic consumption, strong investment fuelled by foreign
direct investment (FDI) and domestic enterprises, and an improving agriculture
sector, he added.
Vietnam
has been able to mobilise an abundant supply of young, well educated workers to
attract foreign investment to labour-intensive manufacturing over the last
decade. However, as the Vietnamese economy becomes more sophisticated, the gap
between worker qualifications and business needs is widening, Sidgwick warned,
noting that if not addressed, this skills gap could become a major obstacle to
Vietnam’s development aspirations.
The
ADB report showed that robust private consumption is expected to be supported
by rising incomes and stable inflation and prospects for private investment are
bright.
By
sector, solid FDI should enable the industrial sector to maintain strong growth
momentum. Construction is projected to pick up in 2018 and 2019, benefitting
from last year’s record FDI commitments and disbursements.
Meanwhile,
the service sector is projected to sustain growth in 2018 and 2019, with
tourist arrivals forecast to rise by 15-20% this year and bank lending to grow
by 17-18%. Agriculture is expected to continue to pick up over the next two
years, growing in 2018 broadly in line with the government target of
2.8-3.0%.
Inflation
is projected to edge up but remain broadly stable, averaging 3.7% this year and
rising to 4.0% in 2019 as strong domestic demand and high bank lending are
partly offset by stable domestic food and transportation costs, along with
smaller increases in administered prices for education, health care,
electricity and water.
The
current account surplus is projected to narrow to 2.5% of GDP this year and
2.0% in 2019. Merchandise exports are forecast to rise by 15-20% in 2018 and
2019. Remittances are likely to remain strong thanks to improving global
prospects and a stable exchange rate.
Alongside
continued growth, Vietnam’s economy this year will still be facing risks and
challenges. These include the need for state enterprise reform, negative debt,
and an increase in global protectionism.
To
overcome these challenges, ADB recommends that Vietnam restore its financial
sustainability, consolidate its external balance, and control inflationary
pressures. Alongside this the country must also narrow the occupational skills
gap in its workforce in order to attract FDI and continue to maintain growth
momentum.
Since
Vietnam’s annual trade turnover has now surpassed 185 per cent of its GDP, the
country now finds itself being the second-most commercially viable economy in
Southeast Asia, just behind Singapore./.
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All comments [ 4 ]
Viet Nam is set to continue its strong economic performance, with GDP growth forecast to rise to 7.1% this year, before easing back to 6.8% in 2019.
A major disruption in trade between two of Viet Nam’s largest trading partners, the United States and the People’s Republic of China, could have spillover effects on economic growth.
Hope that development on economy will lead to achievements on promoting human rights and social welfares.
Vietnam’s robust growth will be driven by strong manufacturing and export growth, rising domestic consumption, strong investment, and an improving agricultural sector.
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