Standard Chartered expects Viet Nam’s economy to grow at 6.8 per cent in 2018, buoyed by strong manufacturing activity.
The bank made this forecast at its Global Research Briefing held on Wednesday in HCM City, drawing senior representatives from over 100 local and foreign corporate clients. The annual event discussed Standard Chartered’s recently published Global Focus – Economic Outlook 2018 report titled “Beware of the Dog,” and its latest Global Research report on Viet Nam titled “Viet Nam in 2018 — Fast or Furious?”
“Most macro-economic indicators in Viet Nam improved in 2017, which helped to minimise market volatility, increase Viet Nam’s export competitiveness relative to other ASEAN economies, attract Foreign Direct Investment (FDI) and create public confidence towards the State Bank of Viet Nam’s management capabilities and policies. We are confident that the Vietnamese economy will remain one of the fastest growing in Asia in 2018,” said Nirukt Sapru, CEO, Viet Nam, ASEAN and South Asia Cluster Markets, Standard Chartered.
“Viet Nam recorded a nine-year high GDP growth rate of 6.8 per cent year-on-year in 2017, in line with our forecast and exceeding consensus expectations. We are positive about Viet Nam’s growth medium-term on strong manufacturing activity as FDI inflows to electronics manufacturing remain strong,” said Chidu Narayanan, economist, Asia, Standard Chartered.
According to the latest macro-economic research report on Viet Nam, manufacturing is likely to expand in double digits in 2018, supported by still-strong FDI inflows and robust global demand for electronics.
Electronics export growth is projected to remain robust near-term, leading to a trade surplus and supporting overall growth. The bank forecasts FDI inflows to stay strong this year close to US$15 billion and the inflows to the manufacturing sector, particularly electronics manufacturing, to remain high in the medium term.
“Viet Nam has benefited from its participation in regional trade pacts, a young and educated population, cheap and growing labour force and geographical proximity to China, which should continue to attract strong FDI inflows over the medium term,” Chidu said.
The study also expects steady growth in services to support overall growth, led by strong domestic trading activity. The services sector, which makes up close to 40 per cent of the economy, rose by a robust 7.45 per cent year-on-year in 2017, the fastest since the global financial crisis. Construction should also continue to increase this year and see a growth rate of slightly below 10 per cent, after the moderate slowdown in full-year 2017.
The event is part of the 2018 Standard Chartered Global Research Briefing series, which is organised by the bank in major ASEAN cities to provide its clients in-depth insight and analysis on global, regional and local socio-economic trends that will have an impact on international business and trade in the year ahead. — VNS
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