Vietnam is on course to achieve the target GDP growth of 6.7% (and will probably exceed this figure). The National Assembly has recently passed a resolution on the socio-economic plan for 2019, which includes a GDP growth target of 6.6% to 6.8% which will continue to position Vietnam as one of the world’s fastest growing economies.
A corner stone of this continued growth is expected to be Foreign Direct Investment, particularly in the processing and manufacturing sector and this is being accelerated by the move away from China and to Vietnam, in many cases, due to the ongoing trade conflicts between China and the USA. FDI this year has seen disbursements of US$ 15 billion in the first 10 months of this year and US$ 18 billion forecast for the year. As of the end of October there were over 13,000 FD investments into the processing and manufacturing sector with registered investment of over US$ 192 billion accounting for over 55% of the total foreign direct investment, into Vietnam.[1]
It is interesting to note that that the Government is still working on solutions and reduced administrative procedures in order to continue to attract FDI and in particular high technology industries to help drive future growth and improve productivity. In the first 10 months of this year the export of electronic products has reached US$ 65 billion, up 12% on the previous corresponding period.
As reported by the Vietnam Investment Review Focus Economics sated that Vietnam’s outlook for 2019 remains favourable with growth supported by strong private consumption and fixed investment. They also supported the view on diverted investment from China because of the uncertainties created by the “trade war” with USA.
Other targets approved by the National Assembly included price inflation to remain below 4%, export growth 7-8%, and a trade deficit below 3% of export turnover.
Kenneth M Atkinson
[1] Ministry of Planning and Investment
