In its Asian Development Outlook 2019 Update launched on September 25, ADB noted that while Vietnam’s gross domestic product growth moderated in the first half of 2019, it will remain resilient this year and next year despite a weaker external environment.
Inflation forecasts are revised down to 3 percent from 3.5 percent for 2019 and 3.5 percent from 3.8 percent for 2020.
According to ADB, the recent signing of a free trade agreement with the European Union and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership promises to further open market access for trade and investment. A recent amendment to the Public Investment Law should improve public investment by accelerating processes, simplifying procedures and enabling faster disbursement of public investment.
While retaining the growth outlook for Vietnam for this year and the next, the report also highlighted significant risks to the forecast. Further escalation of the US-China trade tension and continuing global economic slowdown could shrink global trade, which will adversely impact the country’s trade performance and economic growth.
ADB Country Director for Vietnam Eric Sidgwick said despite a slowdown in export growth due to the escalation of the trade conflict between the US and China and the consequent downturn in global trade, “the economy remains healthy thanks to continued strength in domestic demand and sustained inflows of foreign direct investment.”
“Prospects for domestic consumption continues to be positive, supported by rising incomes, buoyant employment, and moderate inflation,” he added.
