Strong economic growth in first half of 2015 driven by buoyant private consumption and foreign direct investment prompts upward revision.
Vietnam’s economic growth will exceed expectations for 2015 and 2016, according to the latest Asian Development Outlook Update (ADOU) 2015 from the Asian Development Bank (ADB), released on September 22.
In the report the ADB has revised its forecasts for Vietnam’s GDP growth upwards to 6.5 per cent for 2015 and 6.6 per cent for 2016 compared to forecasts made earlier this year.
Speaking at a press conference, Mr. Eric Sidgwick, ADB Country Director for Vietnam, said that the country’s improving growth performance is being driven by a number of factors, especially stronger output from the manufacturing sector and also rising consumer spending and macro-economic stability.
The report also noted that manufacturing output growth is particularly strong, increasing 9.9 per cent in the first half of the year as foreign-invested factories boost the production of goods for export.
This growth is likely to continue, with foreign direct investment disbursements reaching record levels in the first half of the year. Construction accelerated by 6.6 per cent during the first half, owing to a modest recovery in the property market and public investment in infrastructure.
Despite the achievements, Vietnam still faces some growing macro-economic challenges. Slowing economic growth in China, one of Vietnam’s largest trade and investment partners, may dampen trade prospects, while continued low global commodity prices will reduce export earnings for key sectors like oil and agriculture.
“To mitigate these challenges it will be vital for the country to continue to deepen structural and financial sector reforms, increasing productivity growth and boosting its international competitiveness,” Mr. Sidgwick said.