Positive Outlook for Vietnam Economy in Second Half of 2019

10:28:32 AM | 7/16/2019

In the last six months of 2019, Vietnam’s economy is forecast to have a good growth rate, projected at 6.6% according to the World Bank. Some key economic sectors are expected to see positive breakthroughs.

Positive signals

This is clearly demonstrated by Taking Stock, the World Bank’s bi-annual economic report on Vietnam released in Hanoi on July 1. According to Mr. Sebastian Eckardt, Lead Economist for the World Bank in Vietnam, the forecast of the World Bank’s economic growth indicators is quite close to the Vietnam economic survey published by the National General Statistics Office a few days ago.

The World Bank’s forecast for the last six months of 2019 is at 6.6%, much lower than 6.8% in Q1/2019, or 7.5% in Q1/2018 and 7.1% in 2018; this is, however, within the safe, acceptable threshold. Heavily impacted by external factors, the domestic economy still maintained a good growth, said Mr. Sebastian Eckardt.

The successful signing of EVFTA agreement will create great opportunities for businesses and investors of both sides in the future. From an export perspective, EU is a big trading partner of Vietnam with a market of 512 million people and high income. This will be a fertile land for Vietnam's spearhead exports such as textiles, footwear, agricultural products, wooden products.

“Vietnam needs to prepare to adjust its macroeconomic policies in case some of these risks materialize and lead to a deeper than expected downturn,” said Mr. Ousmane Dione, World Bank Country Director for Vietnam. “Vietnam will also continue to push for deeper structural reforms, enhance export competitiveness, and further deepen trade integration through bilateral and regional agreements.”

Smokeless industry will be a new growth engine

In the World Bank report, Vietnam's tourism industry will be a big growth driver of Vietnam in the coming time. In 2017, tourism contributed 8% of the country’s GDP. This is also a strong breakthrough growth of this industry.

The lack of product and location diversification is placing strains on Vietnam’s most frequently visited destinations and elevating risks of overcrowding, especially in months when the seasonality of domestic and foreign travelers overlaps. Popular destinations include HCM City, Hanoi, Da Nang, Khanh Hoa and Quang Ninh

The economic experts of the World Bank also said that although Vietnam has potential to develop the tourism industry, the Government of Vietnam also needs to develop a framework policy for the long term development. Specifically, the World Bank recommends the main priorities including enhancing coordination of destination planning and product development, diversifying tourism products and visitor source markets, developing tourism workforce skills, strengthening local tourism value chain linkages, improving visitor flow management, boosting destination infrastructure capacity and quality, and protecting environmental and cultural assets.

Anh Phuong