Vietnam Economic Forecast

Vietnam Economic Outlook

December 13, 2018

Available data suggests the economy remains on solid footing in the last quarter of 2018, although GDP growth is expected to ease from the third quarter’s strong showing. Manufacturing activity appears to have stayed solid in the quarter, highlighted by a pick-up in industrial production in November and the manufacturing PMI hitting an 18-year high in the same month. This was mostly thanks to surging new business inflows and output, and could also be partly due to companies’ efforts to divert supply chains and relocate factories from China amid the U.S.-China trade row. Moreover, tourist arrivals increased at a rapid pace in November, while retail sales grew robustly in the same month, boding well for private consumption. On a less positive note, the external sector showed signs of weakening in Q4, as import growth outpaced export growth in October and November, with the latter month posting a trade deficit.

Vietnam Economic Growth

The economy should continue to advance at a quick clip in 2019, although slowing slightly from 2018’s robust pace. Strong fixed investment and solid consumer spending, supported by low unemployment and a growing tourism sector, should support growth. Meanwhile, greater economic integration within ASEAN and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership should buttress the external sector and boost FDI inflows. Nevertheless, a more challenging macroeconomic climate could dampen the expansion, while skilled labor shortages and a lack of infrastructure could deter companies relocating to Vietnam 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 Yield4.94-0.13 %Jan 21
Exchange Rate23,1990.01 %Jan 21
Stock Market9110.15 %Jan 21

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