Vietnam is one of the six emerging economies to achieve high economic growth rates which were forecast at 6.2 percent in 2016 and 6.3 percent in 2017, according to the World Bank (WB).
The Asian Development Bank (ADB) predicted that the Southeast Asian nation would maintain an economic growth rate at 6.7 percent in 2016 and 6.5 percent in 2017 thanks to increasing FDI attraction, recovered customer confidence index, and enforced FTAs towards creating a more transparent and open business environment.
The ADB proposed Vietnam build macro-economic buffer zones which are able to respond to future economic shocks; especially focusing on fiscal sustainability, foreign reserve, prevention of NPLs, improvement of productivity, and support for SMEs to integrate into the global value chains.
The Hongkong and Shanghai Bank (HSBC) cut its growth forecasts for Vietnam in 2016 and 2017 to 6.3 percent and 6.6 percent (instead of 6.7 percent and 6.8 percent in earlier publication) due to negative impacts of climate change and saltwater intrusion. However, the bank still made positive medium-term outlook.
Macro-economic stability and positive economic restructuring
The HSBC praised the Vietnamese government on cautious macro-economic regulations in favour of economic recovery. Meanwhile, the WB attributed Vietnam’s private business booms to abundant labour force, increasing wages, and stable prices.
The WB and ADB praised the development of the private sector as helping spur economic restructuring. So far, the state sector holds 40 percent of the density and agricultural production makes up 18 percent of GDP. However, the WB warned that slow economic restructuring and fiscal pressure would hold back growth. The HSBC forecast that credit safety measures would lead the construction and real estate sector to enter a new recession period.
Impressive trade activities in 2015
The WTO reported that Vietnam attained the fastest export-import growth rates among 20 leading trade economies in the world. Amidst global trade gloominess, the Southeast Asian nation still gained an export growth rate of 7.9 percent to $162 billion in 2015. The country’s import turnover expanded 12.3 percent to $166 billion last year.
International organisations regarded Vietnam’s export goal of 10 percent as “ambitious” but “within reach” if the nation seizes FTA opportunities and boosts key export commodities like electronics, leather, garments and textiles.
Consolidated business confidence
A survey of 1,584 FDI enterprises showed that Vietnam is one of the most attractive investment destinations in the Southeast Asian region.
As much as 11 percent of FDI enterprises reported that they expanded business operation and recruited 62 percent of new employees. These figures showed the highest growth pace over the last five years.
FDI enterprises hailed Vietnam’s business environment with reasonable tax and less asset risks. However, they still criticised high unofficial costs, cumbersome legal regulations, poor public administrative services, and limited infrastructure.
Source: VGP
Keyword : International organisations, make positive assessments, on VN’s economic picture.
