Standard Chartered Bank says Vietnam economy to grow faster than expected

A Vietnamese seaport

GDP to grow by 7 percent this year and not 6.8 percent as forecast earlier.
Standard Chartered Bank’s Global Focus report on the economy for the third quarter said manufacturing and construction will be the fastest growing sectors this year.

FDI inflows will remain strong, with 50 percent coming into manufacturing, the report entitled “Fattening tail risks” said.

Vietnam received an estimated $16.2 billion in FDI in the first half of this year, down 4.4 percent from the same period last year, according to the General Statistics Office (GSO).

"We are positive on Vietnam’s growth medium-term on strong manufacturing activity as FDI inflows to manufacturing remain strong. We believe that Vietnam will remain one of the fastest growing economies in Asia in 2018,” Asia Economist for Standard Chartered Bank Chidu Narayanan said.

The report said Vietnam would have a trade surplus this year due to high export growth and slowing imports.

The country reaped export earnings of $113.9 billion between January and June, a year-on-year increase of 16 percent. Meanwhile, it spent $111.2 billion importing goods, up 10 percent.

A World Bank report last month had said Vietnam’s economy might expand by 6.8 percent this year, revising upwards the bank’s previous forecast of 6.5 percent. It estimated growth of 6.6 percent in 2019 and 6.5 percent in 2020.

Prime Minister Nguyen Xuan Phuc has said the target this year is to keep inflation below four percent and achieve economic growth of 6.7 percent. The consumer price index increased by 0.55 percent and 0.61 in May and June, pushing the inflation rate for the year-to-date to 3.29 percent.