Illustrative image (Source: Photo tinnhanhchungkhoan.vn) Hanoi (VNS/VNA) - Vietnam’s economyexpanded by 7.1 percent in 2018, but its increasing openness and reliance onforeign investment suggest it is unlikely to be spared from the global growthslowdown arising from rising trade protectionism and tighter financialconditions.
This conclusion was included in the economicanalysis released by Fitch Solutions Macro Research on January 2.
According to Fitch, Vietnam’s real grossdomestic product (GDP) grew by 7.3 percent year-on-year in the fourth quarterof 2018, up from 6.8 percent in the third quarter. This brought full-yeargrowth for 2018 to 7.1 percent, marking the fastest pace of expansion in 11years.
Fitch Solutions said the economy was buoyed bythe export-oriented manufacturing sector, which benefitted from strong foreigndirect investment (FDI) and global growth.
“Although we believe that Vietnam’s manufacturingsector and economy will continue to outperform the region over the comingquarters, growth is likely to face headwinds stemming from rising global tradedisruptions and tightening financial conditions, which will negatively impactglobal economic growth and risk sentiment,” Fitch noted in the report.
The report predicted Vietnam’s real GDP growthwill rise to 6.5 percent in 2019, in line with the wider trend of slowingglobal growth.
Vietnam’s high and growing degree of economicopenness will likely see the slowing of global growth momentum act as a drag onthe country’s export performance in 2019, following export growth of 13.8 percentin 2018. Exports accounted for approximately 103 percent of GDP in 2018, upfrom just around 84 percent in 2013.
The research firm also expected themanufacturing sector to remain a key economic driver and to outperform theregion. Vietnam has grown to become a manufacturing powerhouse – particularlyin electronics – due to its relatively cheap and large labour force,geographical advantages, attractive tax breaks, stable political environmentand open-door trade policies.
“The opening up of the Vietnamese economy alsocame at an opportune time, as China had begun to shift away from lower-end andexport-oriented manufacturing, to focus more on the domestic economy, allowingthe former to gain market share,” Fitch added.-VNS/VNA
This conclusion was included in the economicanalysis released by Fitch Solutions Macro Research on January 2.
According to Fitch, Vietnam’s real grossdomestic product (GDP) grew by 7.3 percent year-on-year in the fourth quarterof 2018, up from 6.8 percent in the third quarter. This brought full-yeargrowth for 2018 to 7.1 percent, marking the fastest pace of expansion in 11years.
Fitch Solutions said the economy was buoyed bythe export-oriented manufacturing sector, which benefitted from strong foreigndirect investment (FDI) and global growth.
“Although we believe that Vietnam’s manufacturingsector and economy will continue to outperform the region over the comingquarters, growth is likely to face headwinds stemming from rising global tradedisruptions and tightening financial conditions, which will negatively impactglobal economic growth and risk sentiment,” Fitch noted in the report.
The report predicted Vietnam’s real GDP growthwill rise to 6.5 percent in 2019, in line with the wider trend of slowingglobal growth.
Vietnam’s high and growing degree of economicopenness will likely see the slowing of global growth momentum act as a drag onthe country’s export performance in 2019, following export growth of 13.8 percentin 2018. Exports accounted for approximately 103 percent of GDP in 2018, upfrom just around 84 percent in 2013.
The research firm also expected themanufacturing sector to remain a key economic driver and to outperform theregion. Vietnam has grown to become a manufacturing powerhouse – particularlyin electronics – due to its relatively cheap and large labour force,geographical advantages, attractive tax breaks, stable political environmentand open-door trade policies.
“The opening up of the Vietnamese economy alsocame at an opportune time, as China had begun to shift away from lower-end andexport-oriented manufacturing, to focus more on the domestic economy, allowingthe former to gain market share,” Fitch added.-VNS/VNA
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