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)|