Vietnam bucks the region's trend with a forecast rise in GDP.
The GDP of Vietnam is expected to reach around 6 per cent this year and 6.2 per cent in 2016, according to today's report released by the World Bank.
"After some turbulence in mid-2014, Vietnam’s economic performance rebounded and year-end growth exceeded expectations. At the heart of this were strong macroeconomic fundamentals, solid foreign investment and exports in the manufacturing sector, and key reforms to the business climate," the report said.
In detail, GDP growth picked up to 7 per cent in the last quarter of 2014, contributing to a growth rate of 6 per cent for the year, the fastest since 2011. The pick-up in economic activity was led by manufacturing and agriculture. The services sector grew by 6 per cent, slightly higher than 2013. The economy in Vietnam, as a result, has been equitable, leading to significant poverty reduction and shared prosperity.
Vietnam’s economy, however, still performs below its potential due to slow-moving structural reforms, especially in the areas of banking and state owned enterprises (SOEs). The World Bank outlined that although 148 SOEs were equitized in 2014, double the number of 2013, it still fell behind the year's target of 200.
Moreover, according to the report, Vietnam in the future will face some important questions as to how it would contain increasing public debt levels and demonstrate greater credibility in implementing the government’s ambitious reform agenda.
East Asian and Pacific countries: GDP growth projections
Source: World Bank Group