The ADB report stated: “With growth moderation likely in the second half of the year for exports, agriculture, and construction, and with continued contraction in mining, GDP growth for the whole year is now seen slightly lower than earlier forecast.”
As inflation is on an upward trend and is unlikely to change course in the near term, the inflation forecast for this year has been revised up to 4% from the previous 3.7%. Forecast for the current account surplus is revised down to the equivalent of 2.3% of GDP this year.
Growth moderation in some big markets, including the European Union and Japan, can dent export opportunities for Vietnam, according to the ADB.
Vietnam’s agriculture should post slower growth at 2.5% this year, below the earlier forecast and the government target of 3%, following severe floods in recent months. Mining output, which contracted by 1.3% in the first half of the year, continues to be handicapped by aging mines, oil fields, and unfavorable weather conditions.
The bank’s latest forecast for Vietnam’s GDP growth is retained at 6.8% next year, while inflation forecast is adjusted upward from 4% to 4.5%.
The country’s GDP is likely to expand 6.83% percent in 2018, according to the country’s National Center for Socioeconomic Information and Forecast. Its GDP growth was estimated by the center under the Ministry of Planning and Investment to stand at 6.72% in the third quarter this year—and 6.56% in the fourth quarter.
Vietnam gained GDP growth of 7.08% in the first half of 2018 – the highest first-half growth rate since 2011. The country’s top legislature has targeted GDP growth of 6.5-6.7% in 2018, compared with 6.81% in 2017.