Vietnam Economic Forecast

Vietnam Economic Outlook

November 13, 2018

Following a robust showing in the third quarter, the Vietnamese economy appears in good stead to record a solid, albeit softer, fourth quarter. Retail sales remained buoyant in October. Moreover, estimates for the 2018 winter rice harvest see this year’s yield surpassing last year’s, even though the summer-autumn harvest was lackluster. Meanwhile, export revenue should be boosted by higher prices for the grain. Industrial production growth slowed in October, but the all-important manufacturing sector continued to grow at a double-digit rate. On the political front, the Ministry of Finance released estimates for the 2019 state budget on 25 October. The budget includes a 7.2% year-on-year expenditure increase, with a sizeable chunk allocated to development investment. With revenues only set for a 7.0% increase, the fiscal deficit is thus expected to come under pressure. In addition, on 12 November, Parliament ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. With more than six countries having signed off on the agreement, it officially takes effect by the end of 2018, boding well for Vietnamese trade prospects.

Vietnam Economic Growth

The outlook for 2019 remains extremely favorable, with growth set to be supported by strong private consumption and fixed investment. Although rising global trade protectionism is generating uncertainty, Vietnam could actually benefit from diverted FDI inflows and relocated production facilities from China. Met the why particular panelists expect the economy to expand 6.6% in 2019, which is unchanged from last month’s forecast, and 6.3% in 2020.

Vietnam Economy Data

20132014201520162017
Population (million)89.890.791.792.793.6
GDP per capita (USD)1,8932,0292,0332,1112,355
GDP (USD bn)170184186196221
Economic Growth (GDP, annual variation in %)5.46.06.76.26.8
Consumption (annual variation in %)5.26.19.37.3-  
Investment (annual variation in %)5.39.39.49.9-  
Industrial Production (annual variation in %)5.97.611.07.39.4
Unemployment Rate3.63.43.43.23.2
Fiscal Balance (% of GDP)-6.6-6.3-6.3-5.6-  
Public Debt (% of GDP)51.855.057.059.8-  
Money (annual variation in %)18.917.716.218.4-  
Inflation Rate (CPI, annual variation in %, eop)6.01.80.64.72.6
Inflation Rate (CPI, annual variation in %)6.64.10.62.73.5
Inflation (PPI, annual variation in %)5.33.3-0.3-0.52.8
Policy Interest Rate (%)7.006.506.506.506.25
Exchange Rate (vs USD)21,09521,38822,48522,77122,711
Exchange Rate (vs USD, aop)21,02921,19821,92922,37022,716
Current Account (% of GDP)4.65.10.34.62.9
Current Account Balance (USD bn)7.79.40.69.06.4
Trade Balance (USD billion)0.40.8-4.12.12.9
Exports (USD billion)133150162177215
Imports (USD billion)133149166174212
Exports (annual variation in %)16.512.67.99.021.6
Imports (annual variation in %)18.212.311.35.021.4
International Reserves (USD)25.934.228.336.5-  
External Debt (% of GDP)38.539.341.744.5-  

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Vietnam Facts

ValueChangeDate
Bond Yield5.19-0.13 %Nov 13
Exchange Rate23,3090.01 %Nov 13
Stock Market9050.15 %Nov 13

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