Vietnam’s economy is expected to grow by 6.8 percent in 2019 and 6.7 percent in 2020, the Asian Development Bank (ADB) said in its flagship annual economic publication, Asian Development Outlook (ADO) 2019.
The Southeast Asian country logged a GDP growth rate of 7.08 percent last year. The ADO report remarks that Vietnam’s economy remains strong growth momentum though moderating amid weakening global outlook.
Speaking at a press conference held in Hanoi on Wednesday to announce the publication, ADB country director for Vietnam Eric Sidgwick said that the economic performance in Vietnam reached a sweet spot in 2018, driven by strong exports and domestic demand.
Economic growth will likely hold up well in the near term, supported by export-oriented manufacturing, foreign direct investment, and sustained domestic demand, he said.
Vietnam's ongoing reforms to improve the business environment and encourage private investment is expected to keep the growth momentum continue, Sidgwick added.
Vietnam’s inflation is expected to average 3.5 percent in 2019 and 3.8 percent in 2020, according to the report.
ADB said Vietnam's growth will continue to be broad-based, underpinned by robust private consumption, the continued expansion of manufacturing, services, and agriculture, and the greater market access for Vietnam’s exports through various free trade agreements, including the recently ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
The report also mentioned risks for Vietnam’s economy, at a time when Vietnam’s key trading partners, which are also the world’s major economies, are weakening.
Vietnam is one of the most trade-dependent countries in the region, with trade volume reaching twice the size of its gross domestic product (GDP), according to the report. However, domestically, lackluster progress in state-owned enterprises reform could be a drag on growth.
The report underlined the importance for Vietnam to strengthen private firms’ integration in the global value chains, which is a key policy challenge for the country's long-term growth.