Vietnam’s manufacturing sector resilient: HSBC
HSBC attributed the resilience of Vietnam’s manufacturing sector to the country’s rising attractiveness as a manufacturing hub, which helped reel in record FDI in 2015 and should boost exports in 2016.
According to a report released on March 3, the bank said in February, the Nikkei Vietnam’s purchasing managers’ index (PMI) fell to 50.3 in from 51.5 in January but new export orders picked up, and employment remained firm.
In 2015, the manufacturing industry expanded 10.6% and contributed 1.6 percentage points to the 6.7% rise in Gross Domestic Production (GDP).
The bank expected production output will remain steady in 2016 and forecast a 10.7% pickup.
Encouragingly, after surging to a record high in 2015, foreign direct investment (FDI) continued to flow into the country in the first two months of 2016 with registered FDI reached US$2.8 billion as of February, representing a 135% year-on-year increase.
In 2015, the manufacturing industry expanded 10.6% and contributed 1.6 percentage points to the 6.7% rise in Gross Domestic Production (GDP).
The bank expected production output will remain steady in 2016 and forecast a 10.7% pickup.
Encouragingly, after surging to a record high in 2015, foreign direct investment (FDI) continued to flow into the country in the first two months of 2016 with registered FDI reached US$2.8 billion as of February, representing a 135% year-on-year increase.
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Meanwhile, domestic demand will likely remain firm thanks to private spending, which has been supported by still-low rates. The bank expected GDP to rise 6.7% in 2016, unchanged from last year, and forecast growth to accelerate to 6.8% in 2017.
However, the bank also forecasted inflation will climb to 5.2% by year end, breaching the government’s target ceiling and the State Bank to switch to a tightening mode in the second half of this year.
The bank added the State Bank will likely use administrative tightening measures to cool lending, especially in the real estate sector.
