How will the Vietnam economy be in 2018?
ADB (Asian Development Bank) has predicted a 6.8 percent GDP growth rate for Vietnam in 2018, a figure which is much higher than the average growth rate in the region.
The Vietnam economy depends heavily on the world economy which began entering a prosperous period after 10 years of difficulties.
“This will continue in 2018,” said Vo Tri Thanh, an economist, though he thinks achievements in 2018 won’t be as great as in 2017.
"The stock market in 2018 will continue to be supported by the world economic growth cycle," Pham Minh Huong, Chair of VnDirect Securities, said.
Huong mentioned the possibility that the Vietnam stock market would be upgraded to an Emerging Market by the end of 2019 or early 2020.
However, experts warn that Vietnam will face risks and uncertainties, especially related to geopolitics and protectionism.
NCIF (National center for Socio-economic information and forecast) predicted that the FED’s plan to raise the prime interest rate four times in 2018 would slightly decrease by 0.0075 percentage points Vietnam’s GDP.
Meanwhile, ECB may cut quantitative easing (QE) by half (30 billion euros a month from January to September 2018) which may lead to 0.0167 percentage point drop in Vietnam GDP.
However, NCIF believes that Vietnam will benefit from bilateral and multilateral FTAs. As for TPP, which has turned into CPTPP, Vietnam will still benefit without the US. It is estimated that CPTPP may increase Vietnam GDP by 1.32 percent, or $1.7 billion
While economists all agree that Vietnam will benefit from the strong recovery of the world economy, they also say that many problems in the national economy still exist.
Vietnam’s economic development has been relying on business fields such as manufacturing & processing industries and real estate. The fields will still see development in 2018, but won’t make a breakthrough as they did in 2017.
“NA was very cautious when approving the 6.5-6.7 GDP growth rate plan for 2018,” Thanh commented.
Though believing the figure is attainable, Thanh emphasized that it is necessary to harmonize short-term development and institutional restructuring.
Acting chair of the National Finance Supervisory Council Truong Van Phuoc commented that Vietnam depends on exports and its exports depend on trade policies pursued by large economies, including the US.
He also pointed out the existing internal problems of the Vietnam economy, including low technology, the overuse of natural resources, low productivity and low competitiveness.
Meanwhile, under the impact of the 4.0 revolution, only countries with high technology levels will benefit