Stable H2 economy forecast

Update: August, 14/2017 - 03:00
Workers at the Regent Garment Factory Ltd. In Hải Dương City. – VNA/VNS Photo Trần Việt
Viet Nam News

HÀ NỘI – Việt Nam’s business climate is anticipated to improve in the second half of 2017, but economic growth will be at 6.5 per cent, falling short of the Government’s target.

According to the forecast of the National Centre for Socio-Economic Information and Forecast under the Ministry of Planning and Investment, economic growth in the remaining months will be fuelled by the improving global economy, investment climate, prospect of international integration and upbeat mood of businesses.

The second half of 2017 will witness significant impact from the Government’s reform policies and efforts implemented in 2016, which will support businesses and boost investment higher than last year.

The centre said economic growth will be positive when the three major drivers - agriculture, industry and services - all saw improvement.

The services sector witnessed two-year high growth in the first seven months of this year, while the industry and construction sector is anticipated to continue recovery strongly, particularly the manufacturing and processing industry, along with a steady agricultural sector.

Foreign direct investment (FDI) inflow is also anticipated to benefit from the improving investment climate coupled with the country’s intensive international integration as well as confidence of investors in the Vietnamese economy.

 The centre estimated disbursed FDI would total US$15.3 billion in 2017.

“The increasing FDI inflow is expected to be a major driver for recovery of export growth in the entire 2017,” the report stated.

GDP growth at 6.5 per cent

However, the Vietnamese economy was facing a number of difficulties, especially following the US withdrawal from the Trans-Pacific Partnership and trade protection policies.

In addition, uncertainty in global oil prices, which had fallen to below $50 per barrel, added to the risks.

“If oil prices continue to decline, Việt Nam needs to consider increasing oil exploitation output to meet the growth target,” the report said.

Oil prices would significantly affect inflation in the second half of this year, but prices of goods were forecast to remain stable despite a slight increase in wages from the beginning of July.

The centre forecast inflation would be controlled at below five per cent this year, specifically at four per cent.

GDP growth would be some 6.5 per cent, lower than the Government’s target of 6.7 per cent.

Many organisations recently forecast lower-than-target GDP growth for Việt Nam in 2017.

HSBC recently lowered its GDP forecast for Việt Nam to six per cent this year, down from its previous forecast of 6.4 per cent.

The International Monetary Fund forecast Vietnamese economic growth at 6.3 per cent, down from an estimate of 6.5 per cent published in May.

The World Bank projected the Vietnamese economy to grow at 6.3 per cent this year.

The Asian Development Bank maintained its growth forecast for Vietnamese economy at 6.5 per cent in 2017 and 6.7 per cent in 2018. – VNS