In addition to a bright outlook for the economy, the Ministry of Planning and Investment (MPI) pointed to a number of challenges to the economy, including trade wars between nations, geopolitical risks, growing trend of protectionism and nationalism.
Vietnam is expected to maintain its growth momentum from last year, posting a bright economic outlook for 2018, stated the MPI.
12 economic targets within reach
According to the MPI’s recent report, all 12 economic targets set by the National Assembly for 2018 could be achieved, eight of which may exceed expectations.
Specifically, the GDP growth rate for 2018 is set to reach 6.7 percent, while the MPI predicted the agricultureforestryfishery sector to reach growth rate of 3.3 percent this year, thanks to marked improvements recently.
Additionally, the industryconstruction and services sectors are expected to reach growth rate of 7.59 percent and 7.35 percent, respectively.
Vietnam’s nominal GDP in 2018 is forecast to stand at nearly VND5,555 trillion (US$240.5 billion), leading to GDP per capita of $2,540, up 6.3 percent year-on-year.
The consumer price index (CPI), a gauge of inflation, expanded 3.52 percent year-on-year in the first eight months of 2018, against the government target of 4 percent. This resulted in an increase by 1.38 percent year-on-year of the inflation rate during the JanuaryAugust period.
The MPI added that the economy is on track to keep the CPI below the 4 percent target this year.
Notably, Vietnam’s trade turnover in 2018 is estimated to reach $475 billion, up 11 percent year-on-year, of which, export turnover would be $238 billion, up 11.2 percent year-on-year and exceed the target of 78 percent set by the National Assembly and 810 percent of the government. Meanwhile, Vietnam is expected to import $237 billion worth of goods, up 12.3 percent year-on-year, leading to a trade surplus of $1 billion, exceeding the target of having trade deficit below 3 percent of total trade value.
Total capital investment in the first six months stood at VND747.6 trillion (US$32.19 billion), up 10.1 percent year-on-year. The figure for 2018 is estimated at VND1,890 trillion (US$81.41 billion), up 13.3 percent year-on-year and equivalent to 34 percent of GDP, which is also at the upper half of the target range set by the National Assembly (3334 percent).
Moreover, in the first eight months of 2018, Vietnam has 87,448 newly established enterprises with registered capital of VND878.6 trillion (US$37.84 billion), up 6.9 percent in registered capital and 2.4 percent in quantity year-on-year.
There were also 20,942 enterprises resuming operations during the period, up 0.3 percent year-on-year, resulting in a total of 108,400 enterprises starting or resuming operations in the first eight months this year.
The MPI expected Vietnam to have a total of 130,000 newly established enterprises in 2018, up 2.5 percent year-on-year.
GDP growth rate of 6.66.8 percent in 2019
Based on the socio-economic conditions in 2018, the MPI predicted Vietnam’s GDP in 2019 to reach 6.6-6.8 percent, while export growth target is expected to reach 7-8 percent and CPI growth of 45 percent.
Vietnam is expected to mobilise investment capital of around VND2,0362,097 trillion (US$87.6890.31 billion), up 7.711 percent year-on-year or 3334 percent of GDP.
Export turnover is set to reach $256 billion, up 78 percent year-on-year, while imports targets $261 billion, up 10 percent, leading to a trade deficit of $5 billion, below 3 percent of total trade turnover.
In addition to a bright outlook for the economy in 2019, the MPI pointed to a number of challenges to the economy, including trade wars between nations, geopolitical risks, growing trend of protectionism and nationalism.
Moreover, the Vietnamese economy also faces internal shortcomings, such as low technological and economic development level, depleting land and natural resources. There is also significant gap between the domestic and foreign invested sector, especially in trade activities.
Meanwhile, traditional driving forces of the economy such as investment capital and mining industry are fading and gradually replaced by manufacturing and processing.
However, most of Vietnam’s manufacturing and processing is found at the lower end of the global value chain, while there has not been any foreign-invested large scale project registered in the 20192020 period as in previous years.