Overview of the conference. Source: Nguyen Tung.
“This is particularly important as Vietnam has shifted its focus on dealing with external risks,” Cung said in a conference discussing Vietnam’s economic performance in the first six-month period on July 12.
Vietnam’s GDP growth reached 6.71% in the second quarter, slightly down from the 6.82% rate recorded in the previous ones. In the January – June period, Vietnam’s economy expanded 6.76%, lower than the rate of 7.05% in the same period last year, but higher than the average rate of the first six months in the 2011 – 2017 period.
Nevertheless, Cung expected the country’s economy to grow at 6.82% in 2019, which is in line with the government’s target of 6.6 – 6.8%.
The CIEM’s director revealed his predictions for the economy this year with export growth of 8.02%, trade surplus of US$800 million and the inflation rate of 3.38%.
The consumer price index (CPI), a gauge of inflation, expanded 2.65% and 2.64% in the second quarter and the first six months. Cung noted the core inflation rate in both the first quarter and the six-month period were significantly higher than in those of the 2017 – 2018 period, requiring a more cautious approach in managing monetary policy.
As of the end of the second quarter, credit grew at 4.07% quarter on quarter and up 7.33% against the end of 2018.
“Room for credit expansion for 2019 remains low, due to high ratio of credit to GDP,” Cung said.
For the remaining six months of 2019, Vietnam’s economy could face risk from potential slowdown of the global economy, Cung said, but adding the impact may not be clear in the final months of the year.
Other risks included the ongoing trade war between world powers, and delay in ratification of the EU – Vietnam Free Trade Agreement, as the EU is being occupied with other pending issues regarding Brexit and negotiating trade deal with the US, Cung stated.
Moreover, Vietnam’s exports predicted to face a bumpy road ahead with growing trade protectionism measures from other markets, not only in the US, Cung continued.
“Under this context, Vietnam’s government should continue to solidify the macro-economic base, focusing on enhancing economic resilience and minimizing potential risks in a global environment with growing uncertainties,” Cung stressed.
Vietnam Institute for Economic and Policy Research (VEPR) on July 11 released its forecast on Vietnam’s economy with GDP growth of 6.96%, coming on the back of strong GDP growth of over 7% in the remaining two quarters.
VEPR Director Nguyen Duc Thanh asserted the FDI sector remained a bright spot of the economy, playing a crucial role in export-led economic growth .
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