Vietnam’s economy has weathered the recent turbulence in the external environment fairly well, with growth expected to come in at 6.5 percent this year, the World Bank said Wednesday.
The new estimate was up from a forecast of 6.2 percent in the lender’s October report and same as the Vietnamese government’s projection.
“Stronger domestic demand, robust export performance, low inflation and improved confidence have enabled Vietnam to create firmer foundations for mid-term growth,” Victoria Kwakwa, the bank's country director in Vietnam, said in a statement.
Better macroeconomic conditions helped maintain stability in the banking system, according to the report.
On the external front, Vietnam’s export performance remains strong, with total export turnover in the first nine months increasing by 9.2 percent from the same period last year, mostly thanks to high-tech products such as cell phones, electronics and computers.
The report also features a section on the Trans Pacific Partnership Agreement, in which it argues that the deal is expected to generate considerable benefits for Vietnam.
“The recently concluded TPP will not only improve market access, but will also serve as a critical anchor for the next phase of structural reforms in Vietnam,” Sandeep Mahajan, lead economist for the World Bank Vietnam, said in a statement.
Among the TPP members, Vietnam, as the economy with the lowest per capita GDP, has unique comparative advantages, particularly in labor-intensive manufacturing.
The lender suggests that the TPP could add as much as 8 percent to Vietnam’s GDP, 17 percent to its real exports and 12 percent to its capital stock over the next 20 years.