Bank experts anticipate annual GDP growth rate to rise sharply based on Q1 result.
ANZ has recently released an overview of Vietnam's economy, with the bank's economic experts anticipating a very bright 2015 and 2016 with the least-favorable scenario putting growth at a healthy 6.5 per cent.
The bank believes the actual result may be even better when taking into account the notable achievements of the first quarter. It said that usually the first quarter of the year is sluggish, with the economy gradually recovering to reach maximum speed in the fourth quarter.
In the first three months of the year GDP increased 6.03 per cent year-on-year, exceeding all previous forecasts. The industrial sector increased dramatically, by 9 per cent; its highest increase for the last three years.
The reported also noted a trade deficit, primarily due to imports of machinery, equipment, components and spare parts for production. This suggests that growth in the manufacturing sector will move towards higher exports.
Credit growth in the first quarter rose 1.9 per cent year-on-year and the interbank interest rate also rose, indicating recovery in domestic demand for financial leveraging and business expansions.
Average inflation in the first quarter was just 0.74 per cent thanks to stable food prices (which only increased 2.14 per cent) and falling oil and gas prices. The lower prices of most commodities worldwide saw import turnover fall. With oil and gas prices expected to continue to decline for at least the next six months, ANZ expects a positive effect on the inflation rate for 2015.