Many foreign experts have an optimistic view on the socio-economic situation of Viet Nam over the past few years, especially the reforms undertaken by the Government
06/10/2017
Barron’s Asia quoted Mr.Gareth Leather, Senior Asia Economist at Capital Economics Ltd. - a London-based Research Company, that “Viet Nam will continue to thrive in the near future”.

A view of Ho Chi Minh City from above

He alleged that Viet Nam has observed rather satisfactory economic growth prospects. Exports will continue to thrive as global demand is growing. Many manufacturers are also moving from China to Viet Nam as China is losing competitiveness because of rising costs and rising currency.

According to Gareth Leather, the second key driver of the Vietnamese economy, in the near term at least, is likely to be loose monetary policy (lower interest rate). Private sector credit is currently growing by about 20% on yearly basis, roughly twice the pace of nominal GDP growth. With inflationary pressures subdued, monetary policy, which was loosened further in July, is likely to remain supportive to the economic growth.

On the other hand, Mr. Andrew Harker, Associate Director at IHS Markit, a company compiling Manufacturing Purchasing Managers’ Index (PMI) survey results, said “the third quarter of the year ended on a positive note for Vietnamese manufacturers as improving client demand breathed fresh life into the sector. New orders rose remarkably, feeding through to faster expansions of output, employment and purchasing activity. Manufacturers are, therefore, well placed to record further growth during the final quarter.”

According to Nikkei, Viet Nam's PMI rose from 51.8 in August to 53.3 in September 2017, putting Viet Nam at the top among its ASEAN peers. This signalled a solid monthly strengthening of business conditions, with the most noticeable rate of improvement since April 2017. The health of the manufacturing sector has also strengthened in the past 22 consecutive months.

                >>> Infographic: Socio-economic performance in recent years' Jan-Sep period

“A cautionary note, though, is signalled by a re-emergence of inflationary pressures.Cost inflation was the strongest in over six years amid pressure on the supply of raw materials. In turn, firms upped their owncharges for the first time since April 2017,” said Harker.

At the recent ADB’slaunch ceremony on Asian Development Outlook Update (ADOU), Mr. Eric Sidgwick, ADB Country Director in Viet Nam, commented: “Despite the drop in mining and oil output, the rest of the Vietnamese economy has continued to perform well, driven by its twin engines of export-orientated manufacturing and rising domestic consumption”

According to ADB, Viet Nam's economic growth is expected to rise in the second half of the year, buoyed by further increasesin foreign direct investment and exports, domestic credit growth, a stronger recovery in agriculture, and accelerating disbursements of capital expenditure on national infrastructure programmes.

At the recent meetings with Prime Minister Nguyen Xuan Phuc at the Government Office, many corporations and foreign economic experts expressed optimism about the socio-economic situation of Viet Nam.

Speaking to the Prime Minister, Mr. Ousmane Dione, the World Bank Country Director in Viet Nam,  highly appreciated the achievements Viet Nam has made over the past few years and asserted that "a number of reforms undertaken by the Prime Minister and Government recently, includingtax reform and measures against bad debts are essential and important toViet Nam." "We are willing to accompany and cooperate with Viet Nam’s administrative agencies in realizing these necessary reforms," the World Bank Country Director remarked and proposed that the Government of Viet Nam review and consider the establishment of a reform coordinating agency as successful experience of some countries.

Mr. Timothy Geithner, former US Treasury Secretary and President of Warburg Pincus, a global private equity firm, expressed optimism about Viet Nam's economy with great potential to boost cooperation between Viet Nam and the United States. He said that Viet Nam has recorded strong economic growth and positive development signals, which are conducive to reforms. That is why Warburg Pincus, a investment firm with over 20-year of experience in Asia, is looking for opportunities to invest in Viet Nam.

Addressed by Prime Minister Nguyen Xuan Phuc at the Annual Meeting of Global Investors in Ha Noi, Mr. NiruktSapru, Chief Executive Officer of Standard Chartered Bank in Viet Nam, together with international investors, highly regard Viet Nam as a dynamic market, with great potential for development and qualified human resources. He believes that more and more international investors, especially investors from Europe and the United States will look for opportunities for investment in Viet Nam.

Another view of foreign investors about Viet Nam's economic picture is expressed through "self-explanatory" FDI indicators. According to a report by the Foreign Investment Agency (Ministry of Planning and Investment), in the first nine months of 2017, total registered FDI in Viet Nam reached a record number of $ 25.48 billion, up by 34.3% over the same period in 2016; of which FDI disbursement recorded a sharp increase to $ 12.5 billion, up by 13.4%.

These figures indicate that Viet Nam remains a preferred choice for foreign investors with more positive economic outlook than some countries in the region./.


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