Standard Chartered Bank expects Vietnam’s GDP growth to accelerate to 6.9 percent in 2016, higher than its previous forecast of 6.6 percent driven by better construction activity and manufacturing strength amidst continued strength in FDI inflows.
According to Standard Chartered’s Global Research report released in Ho Chi Minh City on January 27, Vietnam would become the second fastest-growing economy in Asia in 2016, second only to India.
The report updates that the country is moving onwards and upwards although global growth is likely to remain flat at 2.9 percent in 2016.
Consumption is likely to remain the biggest growth driver in 2016, closely followed by investment. However, net exports are likely to remain flat.
The bank’s economists are upbeat about the economic outlook for the country, with strong FDI expected to continue this year.
“We believe Vietnam is an attractive destination for investment, a view echoed by our clients, and we expect strong FDI inflows in 2016 as well,” Nirukt Sapru, CEO of Standard Chartered Bank Vietnam, said.
He regards Vietnam as one of the few prime investment opportunities in an otherwise lacklustre global economy, and expressed his belief that the State Bank of Vietnam’s recent decision to set a daily reference rate for the Vietnamese dong will allow it greater flexibility to respond to increasingly volatile market conditions.
Vu Viet Ngoan, Chairman of the National Financial Supervisory Commission, pointed to the modest increase of domestic economic growth due to a range of unsettled internal bottlenecks and challenges caused by the global economy.
He said the FDI sector continues to be the main contributor to national economic growth.