Vietnam’s economic growth is expected at an average of 6.3% in 2016-2018. (Photo: nangluongvietnam.vn)
Vietnam’s gross domestic product (GDP
) is projected to expand an average of 6.3% in the coming three years, the World Bank
(WB) has said in the latest update of its “Global Economic Prospects” report.
All categories of demand will be buoyed by strong foreign direct investment, growing exports of manufactures, and solid labor markets, the report says, noting that Vietnam and the Philippines have the strongest growth prospects among the large developing ASEAN economies.
The World Bank has lowered the GDP growth forecast for Vietnam to 6.2% this year, down 0.4 percentage point from January 2016 projections. Its output is expected to grow 6.3% in both 2017 and 2018.
In April this year, the bank trimmed Vietnam’s 2016 GDP expansion forecast to 6.2% due to slower private consumption and investment growth.
Droughts in the Central Highlands and saline intrusion in the Mekong Delta in the first three months of this year were the main cause of the downgrade of the projection.
Moreover, external demand for Vietnamese export has been weaker. The export growth has been significantly lower in the January-March quarter in comparison with previous quarters while the foreign-invested sector, the main source of Vietnamese exports, has also seen a decline in export turnover, Sandeep Mahajan, WB’s lead economist for Vietnam, explained.
Growth in the East Asia and Pacific region is projected to slow to an unrevised 6.3% rate in 2016, with China’s expansion expected to ease to 6.7%, as projected in January. The region excluding China is projected to growth at 4.8% in 2016, unchanged from 2015, says the Global Economic Prospects report.
This outlook assumes an orderly growth slowdown in China accompanied by steady progress on structural reforms and appropriate policy stimulus as needed. Growth in the rest of the region is expected to be supported by rising investment in several large economies (Indonesia, Malaysia, Thailand), and strong consumption supported by low commodity prices (Thailand, the Philippines, Vietnam).