|At the event (Photo: VNA)|
In the Asian Development Outlook (ADO) 2019 Update, ADB noted that while Vietnam’s gross domestic product growth moderated in the first half of 2019, it will remain resilient this year and next year despite a weaker external environment. Inflation forecasts are revised down to 3.0 per cent from 3.5 per cent for 2019 and 3.5 per cent from 3.8 per cent for 2020.
GDP growth moderated from 7.0 per cent in the first half of 2018 to 6.8 per cent in the corresponding period of this year. On the demand side, as external demand weakened, volume growth in exports of goods and services slowed by more than half, from 15.7 per cent in the first 6 months of 2018 to 7.1 per cent a year later.
The adverse effect of the export slowdown on GDP growth was well cushioned, however, by continued strength in domestic demand.
Growth moderated across the board in agriculture, industry, and services, but to varying degrees. Prolonged drought and a fresh outbreak of African swine fever dragged growth in agriculture down from 3.8 per cent in the first half of 2018 to 2.4 per cent a year later.
Within agriculture, growth in farm production dropped sharply from 3.1 per cent to 1.3 per cent, and forestry output growth eased from 5.5 per cent to 4.2 per cent, while fisheries sustained strong 6.4 per cent expansion.
“Despite a slowdown in export growth due to the escalation of the trade conflict between the US and the People’s Republic of China (PRC) and the consequent downturn in global trade, the economy remains healthy thanks to continued strength in domestic demand and sustained inflows of foreign direct investment,” said ADB Country Director for Vietnam Eric Sidgwick.
“Prospects for domestic consumption continues to be positive, supported by rising incomes, buoyant employment, and moderate inflation”, Mr. Eric Sidgwick noted.
The recent signing of a free trade agreement with the European Union promises to further open market access for trade and investment, as does the regional Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
A recent amendment to the Public Investment Law should improve public investment by accelerating processes, simplifying procedures, and enabling faster disbursement of public investment.
While retaining the growth outlook for Vietnam for this year and the next, the report highlighted significant risks to the forecast. Further escalation of the US–PRC trade tensions and continuing global economic slowdown could shrink global trade, which will adversely impact the country’s trade performance and economic growth.
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