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Vietnam Economic Forecast

Vietnam Economic Outlook

After a swift expansion in Q3 last year, economic momentum weakened in Q4 as slowdowns in services, industrial activity and construction more than offset an acceleration in the agriculture, forestry and fisheries sector. Higher inflation, dwindling exports and tighter financial conditions dragged on activity. Turning to Q1, our panelists project that growth will accelerate. After China’s reopening, services exports will receive a boost from renewed inflows of Chinese tourists—who made up one-third of Vietnam’s tourist arrivals in 2019. That said, annual merchandise export growth plunged into a steeper contraction in January compared to the Q4 average, likely amplified by lost activity as the Lunar New Year fell in the month this year. Moreover, in the same period industrial activity also contracted sharply, and inflation accelerated, boding even worse for activity.

Vietnam Inflation

Inflation accelerated in January to 4.9% (December 4.5%), driven by higher price pressures for food and transportation. Average inflation is set to accelerate further this year as but still remain below the government’s 4.0% target. Easing supply chain disruptions will likely keep prices in check.

Vietnam Economic Data

2017 2018 2019 2020 2021
Population (million) 93.7 94.7 96.5 97.6 98.5
GDP (USD bn) 220 240 260 271 366
GDP per capita (USD) 2 2 2 2 3
GDP (VND tn) 5 5 6 6 8
Economic Growth (Nominal GDP, ann. var. %) 11.2 10.7 8.9 4.2 33.5
Economic Growth (GDP, ann. var. %) 6.8 7.1 7.0 2.9 2.6
Private Consumption (ann. var. %) 7.2 6.9 7.0 0.4 2.0
Government Consumption (ann. var. %) 5.6 4.7 5.4 1.2 4.7
Fixed Investment (ann. var. %) 10.5 8.2 7.7 4.1 3.7
Exports (G&S, ann. var. %) 16.7 14.3 6.7 4.4 29.4
Imports (G&S, ann. var. %) 17.5 12.8 9.5 2.8 30.1
Industrial Production (ann. var. %) 43.3 8.4 6.9 2.4 2.1
Unemployment (% of active population, aop) 2.3 2.2 2.2 2.5 3.1
Fiscal Balance (% of GDP) -2.0 -1.0 -0.4 -2.9 -3.5
Public Debt (% of GDP) 46.3 43.7 41.3 41.7 39.7
Money (ann. var. of M2 %) 15.0 12.4 14.8 14.5 10.7
Inflation (CPI, ann. var. %, eop) 2.6 3.0 5.2 0.2 1.8
Inflation (CPI, ann. var. %, aop) 3.5 3.5 2.8 3.2 1.8
Inflation (PPI, ann. var. %, aop) 2.8 3.1 1.3 -0.6 2.9
Refinancing Rate (%, eop) 6.25 6.25 6.00 4.00 4.00
Stock Market (ann. var. of HSX %) 48.0 -9.3 7.7 14.9 35.7
Exchange Rate (VND per USD, eop) 22 23 23 23 22
Exchange Rate (VND per USD, aop) 22 23 23 23 22
Current Account Balance (USD bn) -1.6 5.9 13.1 15.1 -3.8
Current Account Balance (% of GDP) -0.7 2.5 5.0 5.6 -1.0
Merchandise Trade Balance (USD bn) 10.8 16.5 21.5 30.7 17.7
Merchandise Exports (USD bn) 215.1 243.7 264.2 282.6 336.3
Merchandise Imports (USD bn) 204.3 227.2 242.7 251.9 318.6
Merchandise Exports (ann. var. %) 21.8 13.3 8.4 7.0 19.0
Merchandise Imports (ann. var. %) 23.4 11.2 6.8 3.8 26.5
Foreign Direct Investment (USD bn) 14.1 15.5 16.1 15.8 15.7
International Reserves (USD bn) 49.1 55.5 78.3 94.8 109.4
International Reserves (months of imports) 2.9 2.9 3.9 4.5 4.1
External Debt (USD bn) 104.1 106.9 117.3 125.1 136.2
External Debt (% of GDP) 47.2 44.4 45.1 46.2 37.2

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