Economy Still On Track To Hit 2014 Growth Forecast of 5.9%
BMI View: Latest GDP figures show that the Vietnamese economy grew by 5.0% y-o-y in Q114, and we believe that our 2014 real GDP growth forecast of 5.9% remains in sight. Indeed, we believe that increased macroeconomic stability, combined with pro-growth policies will help the economy accelerate from 2013 levels. Key downside risks to this view include a faster-than-anticipated slowdown in China as well as the stalling of the country's reform drive.
Latest data released by the General Statistics office of Vietnam (GSO) showed that real GDP accelerated by 5.0% year-on-year (y-o-y) in Q114, slightly faster than the 4.9% print registered in the Q113. Although it showed a deceleration from 6.0% recorded in Q413, we believe that the economy is still on track to hit our 2014 growth forecast of 5.9% in 2014. This would mark a slight acceleration from the 5.4% registered in 2013, and is above estimates by the Asian Development Bank, which forecasts real GDP to reach 5.6% in 2014. We believe that the economy will be driven by a strengthening of private consumption, continued foreign direct investment into key areas of the economy, a more robust external sector, and a rebound in manufacturing activity over the coming quarters. That said, trend growth for the Vietnamese economy will average a slower 6.2% over the next decade, compared to 6.5% recorded in the past 10 years.
Government Policy To Ensure Growth Remains Strong
|Vietnam - Real GDP Growth, (% chg y-o-y)|