Vietnam's economy to grow by 6.7-6.9 percent in 2019
Updated : Wednesday, January 09, 2019 10:30 AM (GMT+0700)

Vietnam’s economy isforecast to grow by 6.8-6.9 percent in 2019 on the back of sound economicperformance in 2018, according to the Vietnam Macro-Economic Outlook 2019,which was announced in Ho Chi Minh City on January 8. 

 
Experts at the event - Source: VNA

Associate Professor Nguyen Duc Trung, who was in charge ofcompiling the report, said the 11-year record growth of 7.08 percent last yearwas made possible by macro-economic stability, inflation kept below 4 percentfor the third three consecutive year, and an improving business climate. 

According to a survey by the General Statistics Office, 85.1percent of enterprises lauded the improved business environment in the firstquarter of 2019, compared to the fourth quarter of 2018. 

The Purchasing Managers’ Index reached 56.6 point in November2018, the highest among ASEAN member states, while the sustainable developmentindex went up 11 places in 2018, placing Vietnam 57th out of 176countries worldwide. 

Experts said the growth in 2019 will be fuelled by theoptimism of the private sector and the recovery of the agro-forestry-fisheriessector alongside good prospects of the world economy. Thanks to valid bilateraland multilateral free trade agreements, Vietnam will also be well-positioned toexpand the global consumption of its goods. 

Nguyen Xuan Thanh, Development Director of FulbrightUniversity Vietnam, said the positive outlook of private consumption willfacilitate the expansion of the services sector, mostly in retail, finance,banking, insurance, tourism, dining, and lodging.  

The agro-forestry-fisheries sector will maintain highergrowth if the crop structure is shift towards serving exports, especially withmore markets welcoming Vietnam’s farm and aquatic produce. 

Meanwhile, the US-China trade dispute, which is only the tipof the iceberg as trade protectionism and non-tariff barriers are rising, isexpected to bring both good and bad impacts on Vietnam, which is an openeconomy (in late 2018, Vietnam’s economic openness was only just behindSingapore in Southeast Asia). 

In the worst scenario, Vietnam’s export markets would suffergreatly from the dispute, and global economic instability would reduce theliquidity of capital flows resulting in shrinking foreign investment.

Le Xuan Nghia, Director of the Business Development Instituteand a member of the National Advisory Council on Finance and Monetary Policies,said a 7 percent growth rate is becoming hard to achieve due to uncertaintiesin the global economy during the 2019-2020 period. Moreover, the US-China tradewar in 2018 demonstrated that trade protectionism is increasing. 

The foreign direct investment flow has been declining acrossthe world, gearing more towards countries with high-tech resources. The totalregistered FDI in Vietnam in 2018 decreased by 15.5 percent from the previousyear, signaling that it will drop more in coming years, he said. 

In 2018, the Vietnamese economy expanded by 7.08 percent, arecord in the past 11 months, one of the highest growth rates in the region andthe world, supported by a 12.98 percent growth in the manufacturing andprocessing sector and a 3.76 expansion in agriculture during 2012-2018. 

The total export-import turnover surpassed 482 billion USD in2018, while trade surplus hit 7.2 billion USD, up 147 percent from 2017. Forthe first time, Vietnam’s State budget collection was able to surpass estimatesby 3.5 billion USD.

Source: VNA 

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