Standard Chartered revises up Vietnam’s 2018 growth forecast to 7 percent
Updated : Wednesday, July 18, 2018 10:33 AM (GMT+0700)

StandardChartered Bank expects Vietnam’s rapid growth of 7 percent year-on-year in2018, higher than its previous forecast of 6.8 percent, with all domesticengines firing together.

 
Manufacturing and construction are likely to remain the fastest-growing sectors
- Photo: VNA

Manufacturing andconstruction are likely to remain the fastest-growing sectors.

The forecast is highlightedin the bank’s recently published Global Focus report for the third quarter of2018 entitled “Fattening tail risks”.

“We are positive onVietnam’s growth medium-term on strong manufacturing activity as FDI inflows tomanufacturing remain strong. We believe that Vietnam will remain one of thefastest growing economies in Asia in 2018”, said Chidu Naryanan, Economist,Asia, Standard Chartered Bank.

According to the latestmacro-economic research report, FDI inflows are set to remain high in 2018, ledby manufacturing which makes up close to 50 percent of inflows.

Disbursed FDI rose to 6.75billion USD in January-May, higher than the year-ago period. 

The bank expects bothregistered and implemented FDI to be close to 15 billion USD in 2018, unchangedfrom the previous forecast.

Standard Charteredeconomists also forecast a mild trade surplus for the rest of the year onstrong export growth and slowing import growth.

Electronics exports arelikely to remain robust in 2018 on strong demand for components, particularlyOLED displays used in mobile devices, and expected to grow by over 20 percentin 2018.

The report also suggeststhat the State Bank of Vietnam (SBV) is likely to remain accommodative in thenear term to support growth, despite rate hikes from major central banks.

Standard Chartered Bankexpects unchanged policy rates in 2018 and a mild devaluation of the Vietnamesecurrency, the dong (VND). 

Specifically, the bankanticipates a mild move higher in USD/VND rate in the quarters ahead andrevised up its USD/VND rate forecasts to 22,950 for the end of the thirdquarter 2018 and 23,000 for the year’s end.

Source:VNA

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