Vietnam Economic Forecast

Vietnam Economic Outlook

September 18, 2018

Available data signals that the economy’s robust performance in the first two quarters spilled over into the third quarter. Industrial production again recorded a double-digit increase in August, albeit losing some pace from July, led by a solid upturn in the all-important manufacturing sector. Retail sales also picked up in July and continued growing robustly in August as a fall in inflation lent support to households’ purchasing power. Although export growth lost ground in August, the trade deficit narrowed as imports also slowed in the month. However, foreign direct investment decelerated, likely owing to tensions stemming from the escalating U.S.–China trade war. In other news, the country’s finance minister, Dinh Tien Dung, called for increased flexibility in the exchange rate on 12 September, as the economy remains on track to significantly reduce its debt burden.

Vietnam Economic Growth

This year’s strong growth is expected to carry into next year, thanks to robust FDI inflows and solid domestic demand. Strong private credit growth and rising incomes should support private consumption, while overseas capital should continue to buoy manufacturing output. However, the ballooning of private credit and, in turn, the debt burden, present risks to financial stability in the medium-term. That said, the government’s move to restrict lending to less productive industries should help reduce those risks. Met the why particular panelists expect the economy to expand 6.7% in 2018 and 6.6% in 2019, which is unchanged from last month’s forecast.

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 Yield5.11-0.13 %Sep 20
Exchange Rate23,3230.01 %Sep 20
Stock Market1,0050.15 %Sep 20

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