VN’s 2018 economic prospects look up

Monday, Dec 11, 2017 08:21

Dennis Hussey, CEO of ANZ Vietnam and Head of the Greater Mekong Region, speaks at the 2018 “Vietnam Amidst a Changing Trade Environment” media briefing session in HCM City. — Photo Courtesy of ANZ.

In their latest report, experts at the Australia and New Zealand Banking Group (ANZ) are optimistic about Viet Nam’s 2018 economic situation.

They have taken into consideration expectations of higher GDP growth rate, restored export and industrial growth attracting FDI inflows, and improving bad debts since the past three years.

Speaking at a press announcement on Thursday, Eugenia Victorino, ANZ’s economic specialist for the Greater Mekong Subregion and Southeast Asia, said that ANZ Research Unit’s GDP growth forecasts for Viet Nam have been adjusted from 6.5 per cent to 6.7 per cent, matching the government’s set goal.

She expressed hope that as long as the country’s export turnover is positive, Viet Nam’s 2018 GDP growth might reach 6.8 per cent, thanks to the government’s preferential policies, human resources investment, and newly signed free trade agreements.

Victorino said that Viet Nam is now a foreign direct investment magnet in the ASEAN region, following 2017 industrial production growth and forecasted high growth for 2018. Potential sectors for FDI have now shifted to electricity and water, rather than manufacturing.

Dennis Hussey, CEO of ANZ Vietnam and Head of the Greater Mekong Region, expected macroeconomic indicators for Viet Nam’s economy such as inflation, interest rates and exchange rates to be kept stable into 2018, due to support from trade surplus and foreign exchange reserves.

ANZ’s forecast for Viet Nam’s 2018 inflation rate is kept at 3.5 per cent, exchange rate in 12-month time of VND23,202 per US$1, and annual interest rate of 6.25 per cent.

Credit growth, on the other hand, has decreased to 15 per cent in mid-November from August’s 19 per cent. This is seen as a good signal of controlled growth in sectors such as real estate, household lending and small and medium-sized businesses, said Victorino.

ANZ’s report recommended that the SBV increase its foreign exchange reserves and spread it over more than two to three months’ worth of imports, instead of the current level of $4.6 billion over 2.7 months.

Hussey warned that bad debts should not be dealt with too quickly, lest they create a detrimental effect on the economy, and it is most important for the State Bank of Viet Nam (SBV) to accurately determine the bad debt ratio. — VNS

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