ADB upgrades Vietnam's growth forecasts for 2015 and 2016

The Asian Development Bank has revised its growth forecasts for Vietnam, projecting that the economy will expand by 6.5% in 2015 and pick up slightly to 6.6% the following year.

 

The ADB cites sensible expansionary monetary and fiscal policies as the measures responsible for restoring macroeconomic stability and reforms boosting business confidence as the primary reasons for the revision.

 

Earlier this year the bank predicted that Vietnam’s economy would grow by 6.1% and 6.2% in 2015 and 2016 respectively. Official data shows that the economy expanded 6.3% in the January-June period, the fastest pace seen in the first six months since 2010.

 

 

Photo for Illustration (Pho to: Thai Thien)

The ADB’s Vietnam head, Eric Sidgwick, said improving economic growth performance was being driven by a number of factors, particularly stronger manufacturing output, rising consumer spending and macroeconomic stability.

According to the Asian Development Outlook Update 2015 released on September 22, Vietnam’s factory output rose by 9.9% in the first half of the year as foreign-invested firms increased the production of goods for export.

 

The report predicts that growth in the manufacturing sector is likely to continue with foreign direct investment disbursements hitting record levels in the first six months of 2015.

 

The ADB notes that the financial sector, after a challenging few years, also appears to be gaining momentum and credit growth looks likely to meet the 2015 target of between 13% and 15% set by the State Bank of Vietnam.

 

Despite these achievements, the Vietnamese economy is facing some growing macroeconomic challenges, notably China’s weaker growth, which could hurt Vietnam’s trade prospects with the world’s second largest economy and one of its largest trade and investment partners.

 

At the same time, continued low global commodity prices will reduce export revenues for key sectors such as oil and agriculture.

 

The head of the ADB in Vietnam advised that to mitigate these challenges, the country should continue to deepen structural and financial sector reforms, increase productivity and boost competitiveness.

 

(Source: nhandan.org.vn)