Vietnam’s GDP projected to grow 7% in 2018

  • Vietnam’s economy could grow by 7.02% in 2018, according to the National Center for Socio-Economic Information and Forecast (NCIF).
  • The NCIF predicted two economic development scenarios for Vietnam in 2018.
  • Under the basic scenario, which NCIF says is more likely to occur, investment in the public sector would help maintain a steady growth rate, playing an important role in regulating the economy.
  • This economic model could see more restructure, but the capital and exports are expected to remain the backbone of economic development. The financial system is projected to maintain its stability, while financial and monetary management are expected to become flexible.
  • Domestic economic growth in 2018 could reach 6.83% under this scenario, while inflation is projected to remain low at about 4.5%.
  • The NCIF forecasts a higher GDP growth rate under the high economic growth rate scenario if the economy can sustain the results expected in the basic scenario in addition to economic reform and governance aimed at removing bottlenecks in several sectors of the economy.
  • These efforts are expected to create a favorable business environment for the development of the business community. Under this scenario, the economy could grow by 7.02% in 2018, with average inflation at 4.8%.
  • The NCIF said national economic growth in 2018 is expected to sustain its upward trend. Government efforts to remove economic roadblocks put in place in 2017 are expected to have more impact in 2018.
  • Newly signed free trade agreements are projected to bring breakthroughs in investment as well as the expansion of export markets. Localities and ministries have also initiated efforts to improve the business investment environment. These are expected to boost domestic economic development by the end of 2018.
  • Regarding the development of specific sectors, the centre said production and business activities of enterprises are also likely to improve.
  • The NCIF forecast highlighted positive factors in the import and export sectors due to improvements in cooperative relations between Vietnam and other countries, stating that higher growth rates in Vietnam’s key partners could increase demand for Vietnamese goods, the NCIF said.
  • Export levels are also expected to grow due to a recovery in domestic production. The upward trend in consumer spending is likely to continue in 2018 while inflation is expected to remain under control, the NCIF said.
  • However, the NCIF said internal economic problems, including unsophisticated technology and the gradual exhaustion of land and natural resources, still pose a major challenge for domestic economic growth.
  • In 2018, Vietnam’s labour market could face numerous challenges from the fourth industrial revolution (4.0 Industry), which affects all aspects of the economy.

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