Economic Sector

Last updated: Wednesday, January 23, 2019


ANZ Revises up Vietnam’s GDP Growth to 6.7 Pct in 2017

Posted: Wednesday, December 13, 2017

In a recent media briefing themed “Vietnam Amidst a Changing Trade Environment”, ANZ Bank revised up Vietnam’s GDP growth to 6.7 per cent, 0.2 percentage points higher than the previous forecast.

Ms Eugenia Victorino, ANZ’s economic specialist for the Greater Mekong Subregion and ASEAN, said, the current credit growth of Vietnam is the reason for the adjustment. Given current optimistic signals, Vietnam's GDP will continue to reach 6.7 per cent in 2018.

She said that foreign direct investment (FDI) still plays a key role in Vietnam's trade balance in 2017 and Vietnam remains a magnet to FDI flows in the coming years. However, she also warned that the export-oriented economy (80 per cent) of Vietnam is still heavily reliant on the FDI sector. In the long term, Vietnam needs to change this reality. The country needs to make good use of FDI capital, connect labour resources and engage domestic enterprises into global supply chains led by FDI companies.

ANZ forecast that Vietnam's inflation at 3.5 per cent in 2018 as in 2017 but this rate may be different since world crude oil prices in 2018 are currently unpredictable.

The bank also announced that Vietnam’s foreign exchange reserves at US$46.8 billion in 2017. As for VND/USD exchange rate, ANZ believed that the exchange rate will be stable at VND22,900 per US dollar till the end of 2018.

According to ANZ, Vietnam's credit growth expanded robustly even when bad debts increased. Vietnam is effectively controlling bad debts with its credit policies. Credit growth remained at 15 per cent in mid-November, compared to 19 per cent in August.

Ms Eugene Victorino said that Vietnam's bad debts should not be dealt too quickly, adding that it needs certain time because it may disrupt the economy. It is important that Vietnam accurately determines bad debt ratio at banks to handle most effectively.


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