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Concern of the trade conflagration disappeared as Standard Chartered Bank raised its forecast for Vietnam's GDP growth in 2018

Tuesday - 17/07/2018 19:54
After the World Bank, Standard Chartered Bank also raised its forecast for Vietnam's economic growth this year by 0.2% against the previous.
Standard Chartered Bank said that Vietnam's economy will grow at 7% in 2018. This figure is up 0.2% against the forecast of 6.8% by the bank itself before. According to the Government's target, economic growth in 2018 is 6.7% and inflation is below 4%.

According to the report, construction and production are expected to continue to be the two sectors with the highest growth rates in this year. In addition, FDI inflows into Vietnam will continue to be a high level in this year, especially in the manufacturing sector, which accounts for nearly 50% of total capital FDI. In the first five months of this year, realized capital FDI reached USD 6.75 billion, and it is expected that in the year 2018, Vietnam will attract nearly USD 15 billion of foreign capital.

Chidu Narayanan, Asia's chief economist at Standard Chartered Bank, noted that FDI inflows into manufacturing remained high as a driver of Vietnam's growth in the medium term.

Standard Chartered Bank's economists also forecast that Vietnam will have a moderate trade surplus by the end of the year thanks to strong export growth while slower imports. Exports of electronics are expected to continue to grow sharply in 2018 and reach over 20% growth, thanks to high demand for component parts, especially OLEDs for mobile devices.

With the world economic turmoil putting pressure on the foreign exchange market, Standard Chartered said that the State Bank will continue to maintain a flexible policy in the short term to support growth. However, VND is hard to avoid devalution against USD of value this year, the foreign exchange rate in the banking system will reach 22,950 dong at the end of the third quarter and 23,000 dong at the end of 2018.

At the end of the second quarter, figures released by the General Statistics Office (GSO) showed that GDP in the first six months was 7.08% against the same period last year, of which quarter I was 7.45% and quarter II increased 6.79%. This is the highest increase of GDP in 6 months from 2011. However, unlike the general increase rules of the economy in previous years, GDP growth slowed down and there is no rules of the next quarter higher than the previous quarter.

With the growth momentum, inflation is also rising again when the consumer price index in six months has increased by 3.29% over the same period of 2017. Experts said that there are quite many challenges if you want to keep inflation below 4. % as set by the Government.

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