IMF expects Vietnam to buck regional slowdown

Vietnam’s upbeat growth outlook bucks the weakening growth trend elsewhere in Asia, the IMF notes. It has lowered estimates for the emerging regional markets by 0.8%, and for major economies of Japan, China and India by 0.7-1.1%.

The country’s economic rebound is driven by supportive policies, such as low interest rates, strong credit growth and the government’s Program for Socioeconomic Recovery and Development, accompanied by strong manufacturing output and a recovery in retail and tourism activity, am IMF release says.

Vietnam’s inflation rose in the first eight months this year, but has remained below the 4% target set by the State Bank of Vietnam, the nation’s central bank.

But the IMF warns that inflation could pick up as economic activity gets back to full speed. Higher costs of transportation, fertilizer and animal feed are likely to raise prices for a broad range of goods and services.

Economic slowdown of Vietnam’s key trade partners, including the US, China, and the EU, may also reduce demand for export.

The tightening of financial conditions in major economies to curb inflation, and uncertainty about global trade and financial markets are other factors that Vietnam should watch, it adds.