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Vietnam’s growth forecast at 6.3% in first quarter: HSBC

Vietnam’s growth forecast at 6.3% in first quarter: HSBC

HSBC says Vietnam’s economy will pick up pace throughout the year with growth for the three remaining quarters forecast at 6.4%, 6.7% and 6.8%, respectively.

The respective inflation figures are 4.4%, 4.6% and 3.6%.

According the bank’s experts, such positive forecasts are backed by strong data at the end of 2016, where manufacturing remained the main driver of the Vietnamese economy.

Vietnam continued to gain global market shares in a number of key projects, partly reflecting the economy’s integration into the regional supply chains of multinational companies.

In addition, Vietnam’s highly competitive labour force was also an attraction, helping the disbursement of foreign direct investment reach a record level in 2016.

HSBC predicts that the manufacturing sector will remain strong in 2017. The purchasing managers’ index in December hit 52.4, reflecting solid improvements in the operating conditions of the sector.

The increase in new orders, including export orders, helped boost production activities.

The bank emphasises the need for Vietnam to continue public spending on infrastructure to sustain the pace of economic growth, but also advises the country to continue its efforts to reform public finance, including selling the State’s stakes in State-owned enterprises.

HSBC says public finance reform should include not only more effective management of public funds and debt but also a quicker equitisation of State-owned enterprises.