Hanoi – The Asian Development Bank forecasts Vietnam’s economy to grow by 6.8 percent in 2019 and 6.7 percent in 2020.
In its flagship annual economic publication, Asian Development Outlook (ADO) 2019, the ADB said Vietnam’s economy remains strong growth momentum though moderating amid weakening global outlook.
Speaking at a press conference held in Hanoi on April 3 to announce the publication, ADB Country Director for Vietnam Eric Sidgwick said that the economic performance in Vietnam reached a sweet spot in 2018, driven by strong exports and domestic demand.
Economic growth will likely hold up well in the near term, supported by export-oriented manufacturing, foreign direct investment, and sustained domestic demand. The growth momentum is expected to continue, thanks to ongoing reforms to improve the business environment and encourage private investment,” he added.
Vietnam’s inflation is expected to average 3.5 percent in 2019 and 3.8 percent in 2020, the report said.
According to the report, growth will continue to be broad-based, underpinned by robust private consumption, the continued expansion of manufacturing, services, and agriculture, and greater market access for Vietnam’s exports through various free trade agreements, including the recently ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership
It also mentioned risks for Vietnam’s economy, saying that the world’s major economies -Vietnam’s key trading partners- are weakening. Vietnam is one of the most trade-dependent countries in the region, with trade volume reaching twice the size of its gross domestic product (GDP).
Domestically, lackluster progress in state-owned enterprises reform could be a drag on growth, it added.
The report underlined the importance for Vietnam to strengthen private firms’ integration in the global value chains (GVCs), which is a key policy challenge for Vietnam’s long-term growth.
Improving small-and medium-sized enterprises’ (SMEs) access to finance, and enhancing SMEs’ capability, including workers’ skills, are among important measures to enable SMEs to better adopt new technologies and have more value addition in GVCs, it stressed.
Source: VNA / ADB