Vietnam’s construction industry will grow by 6.3 per cent in real terms of 2017 and 6.1 per cent in 2018, according to Business Monitor International (BMI) Research, a Fitch Group Company.

“We have a positive outlook for Vietnam ' s construction and infrastructure industries, with growth supported by high-value transport and energy projects, regulatory reforms and favorable economic conditions.” the report stated.

Vietnam has a strong project pipeline, particularly in transport and power, as it seeks to improve logistics and address electricity shortages. The government is seeking to draw in foreign private sector expertise given the high technical requirements of these projects.

Ongoing regulatory reforms intended to privatize and break up state-owned enterprises and encourage private-sector participation in the infrastructure space bodes well for continuing levels of investment.

Vietnam's construction and infrastructure industry forecasts

(2016-2021)

f = BMI forecast. Sources: Vietnam General Statistics Office, BMI, 2016

Vietnam scores of 54.4 in our Asia Pacific infrastructure risk/reward Index. It remains in the lower half of the rankings in 13th position, out of 21 countries. This is largely owing to the high business risks due to corruption and significant potential for delays to project development.

The country also scores 40.0 in industry risks, well below the regional average of 61.0, reflecting structural weaknesses in the infrastructure sector.

Vietnam's infrastructure risk reward index, 2016

Source: BMI, December 2016.

BMI Research, a Fitch Group company, provides trusted, independent analysis and forecasts on countries, industries and financial markets. Specializing in emerging and frontier markets, the company covers macroeconomics, political risk and 24 industry verticals across 200 global markets and uses this global awareness to produce a continual, reflexive analysis of how it all fits together.

VN Economic Times