VietNamNet Bridge - While giving different predictions about Vietnam’s GDP growth rate in 2019, institutions all agree that Vietnam will have to face high risks in the time to come.


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The World Bank has predicted a 6.8 percent GDP growth rate for 2018



The World Bank (WB) has predicted a 6.8 percent GDP growth rate for 2018 with stable macroeconomic conditions in the country. 

Vietnam's economic growth is robust despite many external forces, mostly because of strong domestic demand combined with an increase in export-oriented processing and manufacturing industries.

However, in the medium term, the WB believes that Vietnam’s growth will slow down following a downward trend globally.

In theory, Vietnam would benefit from FDI capital diversion as foreign investors tend to make investments in Vietnam instead of China. However, a question has been raised if Vietnam can absorb and exploit the capital flow.

It said that Vietnam’s economic growth will decrease gradually by 2020. Vietnam's trade is highly open, while the fiscal policy remains limited, leaving the economy vulnerable to external factors.

Following the 6.8 percent GDP growth rate in 2018, Vietnam is expected to see the rate falling to 6.6 percent and 6.5 percent in 2019 and 2020, respectively.

Meanwhile, the National Centre for Socio-Economic Information and Forecast (NCIF) has given another scenario. The GDP growth rate predicted by NCIF may reach 7 percent this year, while the high growth rate will be maintained in 2019-2020 to stay at 6.9-7.1 percent.

However, NCIF agrees with WB that there are many latent risks in the economy. 

Tran Toan Thang of NCIF said in Tri Thuc Tre that global trade and investment are on the decline, while uncertainties have risen, especially the US-China trade war.

The major problems lie in the conflict between the US and China, according to Thang. 

The figures about GDP growth and investment attraction in 2018 show encouraging results. However, bad things may come in the next few years.

Thang said in the first period, trade flows will change their orientation, heading for Vietnam and bringing benefits to Vietnam. However, in the long term, when the trade war escalates and spreads out to the production sector, Vietnam will face more negative impact.

In the past, for example, Vietnam could import materials from China at low prices. But this may end in the future, leading to higher production costs as Vietnam has to import materials from other sources at higher prices.

In theory, Vietnam would benefit from FDI capital diversion as foreign investors tend to make investments in Vietnam instead of China. However, a question has been raised if Vietnam can absorb and exploit the capital flow.

Thang said if a high number of foreign invested enterprises come to Vietnam, this may lead to a worker shortage. This could be a high risk for Vietnam if it cannot settle the problems in labor supply.


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