Country Report Vietnam March 2011

Outlook for 2011-15: Economic growth

Economic growth in Vietnam is expected to average 7.2% a year in 2011-15, underpinned by strong growth in consumption, investment and exports. Private consumption growth will be driven by an improvement in the labour market and a consequent increase in real wages. As demand for Vietnamese goods strengthens in line with improving economic conditions globally, the manufacturing sector is expected to ramp up production. This will require more workers, and this stronger demand for labour will in turn encourage growth in wages. In addition, remittances from overseas Vietnamese will remain high, while the development of the financial services industry will make consumer credit more easily available, thus providing an important boost to private consumption. As the demand for exports revives, investment in the form of purchases of capital goods for the manufacturing sector will pick up. Despite concerns about the quality of Vietnam's business environment and a recent downturn in planned foreign-invested projects, foreign investor interest in general remains strong. Demand for Vietnamese goods-particularly in the US, China and Europe-will remain robust, but import expansion will also be significant, and net exports will consequently act as a drag on real GDP growth for much of the forecast period.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
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