International organizations are optimistic about Vietnam's economy

Regarding exports, in August, exports increased by 8% over the same period last year, helping the trade surplus increase by 572.5 million USD in August and reach nearly 2.9 billion USD from the beginning of the year until now.

In particular, FDI capital also continues to flow steadily into the economy. From the beginning of the year to August, FDI capital flows into Vietnam reached 9.8 billion USD, up 8.9% over the same period. The manufacturing and processing sectors attracted the largest FDI inflows, accounting for 73% of the total, followed by real estate accounting for 6%, and the science and technology sector accounting for 4.3%.

Similar to HSBC, ADB also believes that trade is still a bright spot in Vietnam's economy, helping to create a trade surplus equivalent to 8.2% of GDP, a significant improvement compared to 2015. Mr. Eric Sidgwick, Country Director of ADB in Vietnam, said that although in the first half of this year, drought in the Central Highlands and Mekong Delta regions slowed down Vietnam's economic growth, other sectors had strong growth, such as the agricultural sector. The manufacturing sector grew in double digits, trade, services, tourism... all grew well.

Although Vietnam's economic growth is forecast to only grow by 6% this year, ADB believes that Vietnam's economic growth is expected to increase in the last 6 months of the year.

In addition to ADB and HSBC, previously, Nikkei News Agency, in its report on the production situation in Southeast Asia, said that business conditions in Vietnam's manufacturing sector continued to improve. Credit rating agency Moody's also commented positively on Vietnam's economic prospects with a rating of B1, stable outlook.

Moody's assesses that Vietnam's economy is growing well and is highly diversified. Vietnam's exports are still going up, despite the Chinese and global economy slowing down. Growth is also supported by recovering domestic demand and foreign investment, low inflation and strong consumption. Domestic demand increased partly thanks to rapid credit growth and a loose fiscal stance.

Despite positive comments about Vietnam's economy, many international organizations still warn that Vietnam still has many risks: inflation is at risk of increasing, public debt is large, the financial system is still risky, capital capacity and asset quality of banks are still worrying issues...

According to HSBC research experts, although inflation in September was only 3.3%, rising inflation is still a potential risk in the context of unfavorable weather and soil conditions that can push up food prices. Furthermore, gasoline prices have increased again, and regulated costs for some important service sectors such as education and healthcare are also likely to escalate in the next few months... which will spark inflation.

It is also because of inflationary pressure and bad debts that it is likely that banks will find it difficult to lower lending interest rates even when policy interest rates have decreased. In addition, the budget deficit is under stress due to excessively escalating public spending while budget revenues are under pressure.

Faced with these challenges, HSBC recommends that Vietnam needs to continue to promote reform, increase transparency, and open more widely to foreign investors. "If implemented seriously, this reform process will accelerate Vietnam's growth rate like never before," HSBC said.