Vietnam economic outlook 2018
“A large number of experts believe that Vietnam will be able to achieve its target economic growth of 6.7% in 2017. This is due to three main factors: a sustainable rise in FDI, local production recovery and improvements in domestic business environment” – this was one of the main messages from our last year’s article.
After a year, Vietnam did achieve its potential, as it reached the fastest GDP growth in the past 10 years (6.8%, higher than the Government’s target of 6.7%)! In addition, the country enjoyed strong FDI inflows of 17 billion USD, and a 5-year export record.
For 2018, the economists predict similar results with 2017. The GDP growth forecast is between 6.5% (predicted by the World Bank) and 6.7% (prediction of the Asian Development Bank and Vietnam’s government).
According to SSI Research, one of the main reasons why economists keep their optimism up are the high FDI pledges from 2017. These promised funds can result in high disbursed FDI in 2018, which can lead to another year of double-digit growth in FDI disbursement.
In addition, with Vietnam’s focus on exports, and thus its dependency on the global economy, the fact that the world projected to keep expanding in 2018 (albeit with risks related to geopolitical tensions and protectionism concerns) will help Vietnam maintain its growth.
Other positive aspects that we can expect in 2018 are further moves towards signing the Trans-Pacific Partnership (TPP) trade deal without the US, equitization of additional state-owned enterprises (following the recent investment in Sabeco brewery) and a stable inflation rate of around 3%.
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