Vietnam projected to be one of fastest growing economies worldwide in 2019

Vietnam’s economy is projected to expand 6.8 – 6.9% in 2019, becoming the fastest growing economy in Southeast Asia and one of the fastest in the world, according to experts at a year-end meeting held by the State Bank of Vietnam (SBV), the country’s central bank, on December 13.

SBV Governor Le Minh Hung. Source: SBV.

“Despite difficulties from the global economic environment and within the economy itself, Vietnam’s GDP growth in the first 11 months of 2019 was estimated at nearly 7%, and is on track to reach over 6.8% for the whole year,” said SBV Governor Le Minh Hung at the meeting.

The inflation is forecast to grow at 2.57%, lower than the government’s target of 4%, while the macro-economic conditions are solidified, added Hung.

Hung said the banking sector has made significant contributions to stabilizing macro-economic conditions and the country’s high economic growth.

The stability of the foreign exchange policy and reasonable inflation and interest rates were key to supporting the business community and the economy, asserted Hung, adding the record high foreign exchange reserves showed high capabilities of the government and the SBV in creating cushion for external shocks and sustainable development.

According to Hung, the restructuring effort of the banking sector and the handling of bad debts in 2019 have created positive results. As of present, 18 banks have met the Basel II standard on capital adequacy ratio (CAR), earlier than the deadline on January 1, 2020. Meanwhile, the bad debt ratio is kept at a low level, in turn building trust among customers and stabilizing the banking system.

World Bank Country Director in Vietnam Ousmane Dione. Source: SBV.

World Bank Country Director in Vietnam Ousmane Dione said Vietnamese economy has proved its resilience in face of growing uncertainties in global economy.

The World Bank revised up its growth forecast for Vietnam from 6.5% to 6.8% in 2019, indicating that the country would be one of the fastest growing economies in the region and the world, stated Dione.

Francois Painchaud, International Monetary Fund (IMF) Resident Representative for Vietnam and Laos. Source: SBV.

At the meeting, representatives of international financial organizations and credit institutions expected the SBV to continue managing the monetary policy in a flexible and proactive manner, while the government should increase the resilience of the economy and accelerate the institutional reform and development of capital market.