World Bank, HSBC positive about Vietnam's economy

The GDP growth would benefit the country’s exports, especially as free trade agreements that have been signed over the past two years start to bear fruit, Evans said.

The continued expansion of the middle class and in particular the rising affluent sector will lead to changes in consumption as Vietnamese start spending more and more on leisure and travel, a Vietnamese newspaper reported.

The World Bank said in the December edition of its Vietnam Macro Monitoring that Vietnam’s economic conditions continued to improve, with both industrial production and retail sales registering a third month of growth.

Merchandise exports hit a record high of $31.9 billion, helping maintain a second consecutive month of trade surplus while FDI commitment recovered after a brief dip in October, according to the report.

Inflation ticked up due to fuel price hikes, recovering non-food domestic demand and rising logistic costs while credit growth remained stable, providing amble liquidity to support the economy recovery. After two months of decrease, the consumer price index (CPI) increased by 0.3 per cent month-on-month in November.

Compared to a year ago, the CPI rose by 2.1 per cent year on year, slightly higher than in October, but well below the 4 per cent target set by the State Bank of Vietnam.

The government continued its contractionary fiscal stance as the budget balance posted another month of surplus, driven by strong revenue collection, the World Bank document noted.

There is also clear need for fiscal policy support to boost private demand and help the domestic economy recover. Providing financial assistance to impacted workers and households would be an essential avenue to achieve this objective, according to the document.

Fibre2Fashion News Desk (DS)