That Vietnam’s GDP growth ended the first quarter at 6.79%, lower than the 7.45% year-on-year and the government forecast of 6.93%, signals a sticky patch for Vietnam in the remaining months to reach the target of 6.8 – 7% in 2019, according to the Central Institute for Economic Management (CIEM).
Overview of the conference. Source: Nguyen Tung
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Meanwhile, the government continues to give priority to macro-economic stability, improving business environment and bolstering economic resilience against external shocks, Cung added.
Nguyen Anh Duong, head of CIEM’s Macroeconomic Policy Department, said Vietnam’s economy still maintains growth momentum from last year, partly thanks to economic reform and improvements in the business environment.
In the first quarter of 2019, the number of newly-established enterprises reached 28,451, up 6.2% year-on-year, while the number of enterprises resuming operation stood at 15,050, up 78.1%, Duong continued.
In 2019, CIEM forecasts GDP growth at 6.88%, trade surplus US$3.1 billion with export growth of 9.02% and consumer price index (CPI) at 3.71%.
Duong pointed out a number of challenges that could affect Vietnam’s economic performance in 2019, including a potential recession of the US economy, uncertainties surrounding the US – China trade friction, and a delay in EVFTA ratification from the EU side.
Duong said the EU currently is placing its focus on other pending issues, including the Brexit and trade talks with the US. In the first quarter, the EU has ratified a free trade agreement (FTA) with Japan, so the necessity to have another in a short period of time may not be so urgent, he added.
Another issue is the growing number of technical barriers for Vietnam’s exports in foreign markets, including member countries from the Comprehensive and Progressive Trans – Pacific Partnership (CPTPP) of which Vietnam is a member.
Duong expressed concern that the global financial market may overreact against unfavorable issues, especially geopolitical clashes, prompting investors to pull money out of emerging markets, including Vietnam.
Earlier this month, the Vietnam Institute for Economic and Policy Research (VEPR) and the Asian Development Bank (ADB) predicted Vietnam's GDP growth at 6.8% in 2019, while HSBC remained cautious predicting the country’s growth rate at 6.5% in 2019 and 6.3% in 2020.
Vietnam, however, is projected to remain the fastest-growing economy in ASEAN, stated HSBC.
