Illustrative image (Source: VNA)Hanoi (VNA/VNS) — StandardChartered Bank (SCB) on October 6 increased its forecast for Vietnam’sGDP growth rate for the whole year to 6.8 percent, higher than the Government’sset target of 6.7 percent.
This is the highest forecast in thepast nine years. The bank also predicted growth rate of 6.8 percent for nextyear, increasing from its previous forecast of 6.4 percent for 2017 and 6.6 percentfor 2018, driven by faster electronics manufacturing growth inthe second quarter of the year.
“This would make Vietnam thefastest growing ASEAN-6 economy in 2017, likely overtakingthe Philippines,” Chidu Narayanan, economist at SCB, said.
Vietnam exceeded growth expectations inthe third quarter, rising at its fastest quarterly year-on-year pace since theglobal financial crisis.
GDP growth roseto 6.4 percent year-on-year in the first three quartersof 2017, well above the prediction of 6.1 percent, driven by themanufacturing sector.
"We expect thisgrowth momentum to continue, buoyed by the still-strongelectronics sector," he added.
Electronics export growthis likely to remain robust in the near term, driving a trade surplus andsupporting overall growth.
FDI inflow is likely to remainrobust in the medium term, primarily due to theelectronics-manufacturing sector, resulting in strong electronics manufacturing growth overthe next few quarters. Strong FDI inflow is likely tosupport capital goods imports, capping the trade surplus.
Thebank expected inflation to edge down from the 3.4 percentyear-on-year in September on a high base effect. Italso raised its inflation forecast to 3.7 percent for 2017 and3.8 percent for 2018 (from 3.6 percent and 3.7 percentyear-on-year, respectively) on the back of higher-than-expected inflationthis year and faster-than-expected GDP growth.
“Although we expect inflationto edge up to 3.8 percent in 2018, it is likely to remain manageable, allowingthe central bank to maintain its policy rate through 2018,” he said. –VNA/VNS
