VN growth forecast slashed
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The Asian Development Bank (ADB) has lowered its forecast for Vietnam's economic growth this year to 5.1 per cent, predicting growth of 5.7 per cent next year in the context of continued weakness in external markets and domestic credit.
In April, the bank had forecast GDP growth of 5.7 per cent this year and 6.2 per cent next year.
Vietnam has been an export-dependent country relying heavily on the European and US markets, which were also experiencing slowed growth, said ADB economist Dominic Mellor, at a press conference.
“However, there are signs that GDP is picking up due to the cyclicality of GDP, fiscal policy easing and consumption boosted by lower inflation,” Mellor said.
ADB country director for Vietnam Tomoyuki Kimura said that inflation was projected at about 7 per cent this year, well below the previously-projected 9.1 per cent due to a sharp decline in food prices and weaker-than-anticipated domestic demand.
Stabilisation measures taken last year dampened demand, slowing the trajectory of economic growth, Kimura said. GDP therefore grew at a modest 4 per cent year-on-year in the first quarter and 4.7 per cent in the second quarter, resulting in growth of just 4.4 per cent in the first half of the year.
