Vietnam bullish on GDP growth over construction sector boost
Projections on GDP growth has been raised from 6.5% to 6.9%.
The growth of the construction sector is expected to boost Vietnam’s GDP growth in 2019, as Fitch Solutions has revised its real GDP prediction for Vietnam to 6.9% in 2019 from the previous 6.5%.
According to a note, real GDP growth was higher in Q3 2019 at 7.3% YoY compared to 6.7% YoY in the previous quarter.
Fitch Ratings forecasts that the construction sector will further contribute to headline growth, given its surge to 9.7% YoY in Q32019 against Q22019’s 9.1%
Chinese companies helped the manufacturing sector jump to 12% YoY in Q32019 versus 10% YoY in Q22019.
The industrial sector contributed 3.6ppt to GDP growth, its highest in five years, with services remaining resilient at 6.8% in Q3 this year.
On the other hand, droughts and the African swine fever continued to rear their ugly heads on the agriculture and livestock industries, with the agriculture sector reporting a meager increase to 2% YoY for Q3 from 1.7% in Q2.
But whilst the influx of Chinese companies might be benefiting Vietnamese manufacturers, Fitch warns that the US-China trade war may also affect infrastructure and the labour force.