The Institute of Chartered Accountants in England and Wales (ICAEW) has recently released its Economic Insight South East Asia Quarterly briefing for the first quarter of 2016, containing a prediction that Vietnam's economy will grow the most among ASEAN-6 countries in 2016.

ASEAN-6 includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Vietnam ranked first in expected growth this year, with 6.3 per cent, followed by the Philippines and Indonesia with 6.1 per cent and 5.1 per cent, respectively.

The report noted that growth in Vietnam was 6.7 per cent in 2015 as foreign direct investment (FDI) reached record levels and export growth remained strong despite depressed commodity prices.

Its forecast is for growth to stay in the 6-7 per cent range in 2016-18 as improvements in trade access compensate for slowdowns in some key trade partners and non-textile industrial growth promotes export diversification.  

Regarding rising debt burdens increasing risk, Vietnam is already running an expansionary fiscal stance, according to the report’s authors, with higher current expenditure having contributed to a debt-to-GDP ratio approaching 60 per cent this year.

A gradual fiscal consolidation is being planned by authorities over the next few years to avoid breaching the debt ceiling of 65 per cent of GDP.

The best performers among ASEAN-6 will be economies where growth is underpinned by strong domestic fundamentals and there is room for policy support.

In this respect, the authors believe that Vietnam, the Philippines, and Indonesia have the best growth prospects among the ASEAN-6 countries, reflecting healthy domestic factors such as low debt, macro-stability, and wage competitiveness, which will help them continue gaining market share in low-cost industries.