ADB Cuts Vietnam’s Growth Forecast for 2016 to 6 Pct
The Asian Development Bank (ADB) has revised its growth forecast for Vietnam for 2016 to 6 per cent, citing contractions in the agricultural and mining sectors in the first half of the year.
The ADB said in a report released on September 27 that Vietnam’s economy continued to perform well but was being hindered by a number of challenges, such as drought in the Mekong Delta and Central Highlands and low global commodity prices.
Eric Sidgwick, ADB Country Director for Vietnam, said other sectors, in contrast, had performed strongly with manufacturing growing by double digits as foreign-invested companies expanded production.
Services also picked up as a result of rising domestic trade, growing bank lending and a 25 per cent jump in tourist arrivals.
The ADB expects Vietnam’s growth to rise in the second half of the year thanks to further increases in foreign investment, growth and exports, domestic credit growth, a slight recovery in agriculture and an acceleration in disbursed capital for infrastructure projects.
The report stresses that a number of issues will need to be addressed to ensure growth remains sustainable, despite the economy’s reasonably good performance against a challenging backdrop.
A recent surge in bank lending has increased the importance of efforts to tighten regulations to prevent a rise in financial sector risks, while it is necessary to reduce the fiscal deficit to ease public debt pressures.
According to the Asian Development Outlook Update, trade performance remains a bright spot for Vietnam’s economy, as it recorded a surplus equal to 8.2 per cent of the GDP in the first half of 2016—a big improvement over the same period of last year.
But Sidgwick warned that Vietnam’s trade may be affected by a further slowdown in major industrial economies or unexpectedly low growth in China, the world’s second-largest economy.
The ADB expects Vietnam’s economy to grow by 6.3 per cent in 2017.
NDO
Vietnamese
