HSBC Raises Vietnam’s 2017 GDP Growth Forecast to 6.6%

The revision comes as the country recorded much-faster-than-expected growth in the third quarter.

The Hongkong and Shanghai Banking Corporation (HSBC) has revised up its GDP growth forecast for Vietnam this year to 6.6%, from the 6.0% downwardly projected in July and 6.2% updated in September.

The revision was made due to a faster-than-expected growth rate in the third quarter this year.

“Vietnam is now tracking ahead of our full-year growth expectations and the Bloomberg consensus of 6.3%. And with leading indicators still robust, we now revise our growth forecast to reach 6.6% by year-end,” said the bank in a monthly update.

A continued rise in exports and industrial production were some of the primary drivers of growth, as the strong tech cycle in the second quarter persisted throughout the third quarter, the bank noted.

The composition of growth in the July-September showed that the majority of the Vietnamese economy continues to perform well, with the exception of the mining sector.

“We have previously noted that this “mining drag” has marginally slowed the country’s growth over the past few quarters and has negatively affected government revenues,” it added.

The report pointed out that the manufacturing sector’s contribution to growth has steadily climbed since the beginning of the year to reach its highest level in at least 10 years. This is attributable to the expansion of Vietnam’s export industry over the years, particularly in the production of clothing, apparel, and electronics.

“We expect manufacturing to remain robust in 4Q, albeit slowing slightly from a marginal drop in electronics exports, while services should remain steady on the back of strong tourist arrivals,” the bank said.

The Asian Development Bank earlier this month trimmed its economic growth forecast for Vietnam by 0.2 percentage points to 6.3% this year, and warned of risks from the government’s plan to boost credit growth to the local economy.

Tuan Minh / BizLIVE