ADB ups Vietnam’s growth forecast to 6.9% for 2019
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The Asian Development Bank (ADB) has trimmed its forecasts for economic growth in developing Asia this year and next year as growth in the People’s Republic of China (PRC) and India is weighed down by both external and domestic factors.
“While growth rates are still solid in developing Asia, persistent trade tensions have taken a toll on the region and are still the biggest risk to the longer-term economic outlook. Domestic investment is also weakening in many countries, as business sentiment has declined,” said ADBChief Economist Mr. Yasuyuki Sawada. “Inflation, on the other hand, is ticking up on the back of higher food prices, as African swine fever has raised pork prices significantly.”
In a supplement to its "Asian Development Outlook 2019 Update" released in September, ADBnow expects gross domestic product (GDP) in the region to expand 5.2% in both 2019 and 2020, down from the September forecast of 5.4% growth this year and 5.5% next year.
The supplement forecasts inflation of 2.8% in 2019 and 3.1% in 2020, up from the September prediction that prices would rise 2.7% this year and next.
In Vietnam, GDP growth in the first 3 quarters of 2019 accelerated to 7.0%, the highest rate over the same period in the past 9 years. Private consumption rose by 7.3%, and investment expanded by 7.7%, boosted by an improved business environment, continued investor confidence, and increased foreign direct investment. With unexpectedly strong growth momentum in Q3 likely to carry over into Q4 and next year, the growth forecast for Viet Nam is adjusted upward from 6.8% to 6.9% for 2019, and from 6.7% to 6.8% for 2020.
In East Asia, growth in the PRC is now expected at 6.1% this year and 5.8% next year due to trade tensions and a slowdown in global activity coupled with weaker domestic demand, with family wallets being hit by pork prices that have doubled relative to a year ago. Growth could accelerate, however, should the United Statesand the PRC come to an agreement on trade, the report says.In September, ADB forecast GDP growth of 6.2% in 2019 and 6.0% in 2020.
