Confidence in economy rise

Mai Tien Dung, Minister and Chairman of the Government Office, has told VIR that in this year’s second quarter, the economy was expected to grow more than in the same period last year (6,44%), and higher than the 5.6% recorded in this year’s first quarter.

Although the exact figures have yet to be released, it is forecast that in this year’s first half, the economy will grow over 6% year-on-year.

‘Local production is bouncing back, with firms’ confidence significantly improving’, Dung said.

‘The prime minister is determined to boost economic growth by removing all obstacles to enterprises’ operation. He wants to build a more business-friendly government so that the economy can grow 6.7% this year and 6.8% next year’, he added.

‘For example, all sub-licensing must not be enacted, and any violator will be strictly punished’.

Nguyen Van Diep, sales engineering manager of Japan’s Fujikura Fibre Optics Vietnam in the southern province of Binh Duong, told VIR that he felt ‘quite optimistic about the economy’s prospects thanks to the government’s strong will’.

In this year’s first six months, the firm grew 40%, a two-fold increase from 20% in last year’s corresponding period.

‘The local Internet equipment market is showing strong expansion. We are expecting a 50% growth revenue rate for 2016’, Dep said.

During his June 16-17 visit to Vietnam, the Asian Development Bank’s (ADB) president Takehiko Nakao told Vietnam’s leaders that the ADB was upbeat about Vietnam’s economic prospects. The ADB expects an economic growth rate of 6.7% in 2016, equal to 2015’s growth rate. The bank predicts that growth will remain robust at 6.5% in 2017.

Ponpimon Petcharakul, the minister counselor (commercial) from the Thai Embassy to Vietnam, told VIR that ‘Vietnam’s economy is convalescing strongly and we are seeing big potential from Vietnam’s economic prospects. Thousands of Thai firms are planning to do business in Vietnam across many sectors.’

For example, Komol Wongthongsri, a representative from a major Thai group, said the group was considering an investment of about US$100 million in Vietnam’s agricultural and waste treatment projects.

‘Vietnam’s macro-economic situation is quite stable. Thailand and Vietnam are close in geographical proximity, which can help us save a lot in costs’, he said.

Also optimistic about Vietnam’s economic outlook, HSBC expects the economy’s year-on-year growth rates will be 6.1%, 6.6%, and 6.7% in the second, third and fourth quarters, respectively, rising from just 5.6% in the first quarter. HSBC’s forecast is at 6.3% year-on-year for full year 2016, and 6.6% for 2017.

According to HSBC, the manufacturing purchasing managers’ index marked a ten-month high in May, rising to 52.7. The improvement was led by a strong rise in new orders, which suggests that the pick-up in manufacturing activity can be sustained in June. Both industrial production and exports ate tracking higher sequential growth in 2016’s second quarter.

Credit rating agency Fitch recently confirmed Vietnam’s stable outlook and BB-rating. Fitch based their decision on Vietnam’s strong macro-economic performance, supported by a steady inflow of foreign direct investment, favourable political developments that demonstrate a state-wide willingness to prioritise market-friendly reforms, and positive spillover from the potential ratification of the Trans-Pacific Partnership.