ADB upgrades VN’s economic forecast

15:23 | 30/09/2015 Society

Viet Nam’s economic growth is expected to touch 6.5% in 2015 and 6.6% in 2016, according to the Asian Development Bank (ADB).

ADB upgrades VN’s economic forecast

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In its latest Asian Development Outlook Update 2015, the lender raised its economic growth forecast for Viet Nam from the original outlooks made earlier this year.

The lender attributed the higher forecasts to sensible pro-growth monetary and fiscal policies in favor of macroeconomic stability, and recent policy reforms for higher business confidence.

The report notes that manufacturing output growth is particularly strong, increasing by 9.9% in the first half of the year as foreign-invested factories spur 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 would grow by 6.6% during the first six months of 2015 owing to a modest recovery in the property market and public investment in infrastructure.

The report underlines that the Vietnamese financial sector also “appears to be picking up momentum” after some challenging years, with credit growth set to surpass official targets during 2015.

Government policy has also been aided by lower global commodity prices which have helped to contain price growth, lift disposable incomes and lower business costs, according to the report.

However, the ADB warned that in spite of these achievements, Viet Nam does face some growing macroeconomic challenges.

According to the report, slowing economic growth in China, one of Viet Nam’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.

In order to mitigate such challenges, the ADB country director suggested Viet Nam continue to pursue the structural and financial sector reforms, boost productivity and raise competitiveness./.

Source: VGP