StanChart Lifts 2016 GDP Growth Forecast for Vietnam to 6.9%

Tuan Minh

18:00 27/01/2016

BizLIVE - Standard Chartered Bank has raised its 2016 GDP growth forecast for Vietnam to 6.9% from 6.6% previously.

StanChart Lifts 2016 GDP Growth Forecast for Vietnam to 6.9%

Consumption is likely to remain the biggest growth driver of Vietnam's economy in 2016, says StanChart. (Photo: moit.gov.vn)

Vietnam’s GDP growth is expected to accelerate to 6.9% in 2016, higher than the previous forecast of 6.6% driven by better construction and manufacturing activity and continued strength in FDI inflows, Standard Chartered Bank has said in a press release.
This forecast will make Vietnam the second fastest-growing economy in Asia, only after India, Standard Chartered’s Global Research said in a briefing in Ho Chi Minh City on Wednesday.
“We believe Vietnam is an attractive destination for investment, a view echoed by our clients, and expect strong FDI inflows in 2016 as well. We believe the country is one of the few prime investment opportunities in an otherwise lackluster global economy,” said Nirukt Sapru, CEO of Standard Chartered Bank Vietnam.
“We believe that the State Bank of Vietnam’s recent decision to set a daily reference rate for the Vietnamese dong will allow it greater flexibility to respond to increasingly volatile market conditions,” he added.
Executives and researchers talk at Standard Chartered’s Global Research Briefing in Ho Chi Minh City on Wednesday. (Photo: Standard Chartered)
Consumption is likely to remain the biggest growth driver in 2016, closely followed by investment, according to the bank’s researchers.
The bank forecast that the contribution from investment to growth will be stronger than in 2015 as implemented FDI continues to increase this year. However, net exports are likely to remain flat in 2016.
Among other findings, Vietnam is expected to have a moderate trade surplus expected in the first half of this year and may slip into a mild deficit in the second half. The country’s inflation is expected at 1.4% year-on-year   
The USD/VND rate is likely to weaken to 22,500 before sliding to 22,300, a Standard Chartered analyst said.

TUAN MINH