Vietnam's economy is well positioned for growth in international trade and will continue to experience high growth over the next three to five years. (Source: enternews.vn) Hanoi (VNA) - Vietnam’seconomy is well positioned for growth in international trade and will continueto experience high growth over the next three to five years, said ChiefExecutive Officer (CEO) of HSBC Vietnam, Pham Hong Hai.
Hai made the statement during anHSBC Annual Business event themed “Step into the Future”, updating marketplaceinformation and discussing Vietnam’s economic prospects.
“We are bullish for Vietnam’seconomic growth in the short to medium term and cautiously optimistic for thelong term as it is dependent on the progress of our economic reforms,” Haisaid.
“Reform is the only option and wedo not have much time,” he said, adding that Vietnam’s engagement in keyregional initiatives like the ASEAN Economic Community (AEC), the RegionalComprehensive Economic Partnership (RCEP), and EU-Vietnam FTA helps toaccelerate the reform process.
Vietnam’s economy is likely togrow by only 6 percent this year, HSBC said in its latest report, revising itsprevious forecast down from 6.4 percent.
The country’s GDP grew 6.2 percentin the second quarter, driven by gains in both the industrial and servicesectors.
This was higher than HSBC’sforecast of 5.9 percent, but the bank has still reined in its 2017 growthforecast due to the country’s sluggish first quarter.
The credit growth rate reached7.54 percent at the end of June. In early July, the State Bank of Vietnam (SBV)reduced its lending interest rate by 0.25 percent to 6.25 percent for the firsttime in three years to boost economic growth, as Vietnamese companies stillrely heavily on bank loans.
“We do not expect any furthereasing by the SBV this year,” Hai said.
Foreign direct investment (FDI)in the first six months was estimated at 7.7 billion USD, up 6.5 percent overthe same period of 2016.
The manufacturing industryattracted 66.7 percent of total foreign investment, followed by the miningsector at 10.6 percent.
“With new factories commencingoperation this year, we expect FDI to drive further gains in Vietnam’s globalexport market share”, Hai said.
Forecasting the trend of globaleconomic growth, Douglas Lippoldt, Chief Trade Economist at HSBC GlobalResearch, said there were signs that the global trade situation is improving.
Most of Vietnam’s top 10 exportmarkets, including the US, China, Japan and the Republic of Korea, are expectedto improve in the 2017-2018 period, compared to 2016, Lippoldt said.
Increasing import demand in theseleading markets would offer plenty of opportunities for Vietnam, he added.
However, there are stillparticular challenges that Vietnam has to face, such as turbulence anduncertainty in global trade policy, together with rising protectionism in somedeveloped countries including the US, he said, adding that further tradeliberalisation is needed to support the upturn.-VNA
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