12:29 (GMT +7) - Sunday 25/08/2019

Vietnam Today

ADB maintains growth forecast

Released at: 15:54, 18/07/2019

ADB maintains growth forecast

Photo: Viet Tuan

Vietnam the fastest-growing economy in Southeast Asia this year, new ADB report shows.

by Linh San

The Asian Development Bank (ADB) has maintained its growth forecast for developing Asia of 5.7 per cent in 2019 and 5.6 per cent in 2020, unchanged from its April forecast, according to the new Asian Development Outlook (ADO) Supplement.

These growth rates are slightly down from developing Asia’s 5.9 per cent growth in 2018. Excluding the newly-industrialized economies of Hong Kong, China, South Korea, Singapore, and Taiwan (China), the regional growth outlook has been revised down from 6.2 per cent to 6.1 per cent in 2019 and maintained at that rate in 2020.

Vietnam has been the fastest-growing economy in Southeast Asia this year, according to the report. Growth in the first half of 2019 is estimated at 6.8 per cent year-on-year despite agriculture being hobbled by a prolonged drought and African swine fever. Growth in industry and especially manufacturing remained robust, though moderating from the first half of 2018.

Sustaining growth were strong inflows of FDI, up by 27 per cent in the first five months from a year earlier. China overtook South Korea and Singapore to become the largest overseas provider of newly registered capital. The US remained the largest export market for Vietnam and grew 28 per cent in the first five months year-on-year. Growth projections remain at 6.8 per cent for 2019 and 6.7 per cent for 2020, in line with ADO 2019 forecasts.

Inflation for 2019 and 2020 is forecast at 3.5 per cent and 3.8 per cent, respectively.

Data to the end of June show growth in Southeast Asia remaining robust, though slower than forecast. The subregion’s more open economies faced the combined impacts of the trade conflict and a trough in the electronics cycle, which were partly offset by strong domestic demand. Meanwhile, evidence of trade and production redirection is appearing, with some countries seeing increases in FDI and exports.

The ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. It made commitments of new loans and grants amounting to $21.6 billion in 2018. Established in 1966, it is owned by 68 members; 49 from the region.

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