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Chairman's Insights

Vietnam’s economy is forecast to outperform SEA Countries

Kenneth Atkinson OBE Kenneth Atkinson OBE
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The World Bank’s Global Economic Prospects Report, released this month, forecast weak growth for the exporting economies of Indonesia, Malaysia, Thailand and Philippines, however the report was “surprised” by the strong forecast for Vietnam.

The World Bank forecast that Vietnam GDP will grow 6.6% in 2016 marginally lower than the actual rate for 2015 but higher than the Bank’s forecast 6.5% in June 2015. The Bank further forecast 6.3% growth in 2017 and 6% in 2018. These forecast are more conservative than other commentators who are looking for growth over 6.8% this year and similar levels in 2017 and 2018. The Bank was forecasting growth in East Asia and the Pacific Region to average 6.2%.

Focus Economics also forecast that Vietnam would outperform in’s regional neighbours both this year and the next few years. They also forecast that GDP would grow from US$ 192 billion in 2015 to US$ 296 billion in 2020.

The World Bank based their growth forecast on rapid Investment growth based on a high level of confidence in the economy, foreign direct investment, consumption growth driven by high employment and rising wages, and export growth as more FDI projects come on stream. Exports grew 8 % in 2016 to reach US$ 162 billion and are forecast to grow 10% this year.[1]

As previously mentioned FDI last year exceeded US$ 23 billion an increase of over 12% whilst disbursed FDI rose to US$ 14.5 billion.

Kenneth Atkinson

[1] Ministry of Planning and Investment