HSBC forecasts that manufacturing will remain a solid pillar for Vietnam’s economic growth in 2019


In Q1 / 2019, total newly registered FDI and FDI in manufacturing increased by 66% and 33% respectively, which created an important premise for the development of manufacturing industry.

In a difficult 2019, Vietnam still copes quite well with many risks to growth. If you just look at it, some of the published figures are not so optimistic compared to the previous quarters. GDP growth in the second quarter of 2019 slowed to 6.6% as the manufacturing sector slowed down, only 9.4%.

The contribution of manufacturing sector to GDP fell below 2% for the first time in 2 years, pulling back economic growth slightly. However, the real growth momentum of the Vietnamese economy is not bad considering the context of the technology cycle is cooling down and global demand goes down.

Vietnam’s exports in the second quarter of 2019 increased sharply by 9.5% from the lowest level in 13 quarters in the first quarter of 2019. Electronics export has a strong growth momentum, reaching 15% in the second quarter of 2019 from 1% in the first quarter of 2019. The trend of growth is clear. Particularly in June 2019, exports of computer products and phones grew by 17% over the same period – the highest speed in a year.

From the import side, HSBC also saw a growth trend. Imports of electronic products grew by 31%, contributing up to 40% to overall import growth. As HSBC mentioned in the previous study, this will set the stage for the strong growth of electronic export in the near future, because most imported components will be moved into production to serve. export.

In general, Vietnam’s strong manufacturing sector will still play an important role in driving exports and growing, and Vietnam will therefore stand out in an area where the growth trend is in the trend. downward.

The service sector in the second quarter of 2019 increased by 6.9% thanks to the strong growth of the service industry

And not just the manufacturing sector. The service sector, another important pillar of growth, continues to grow steadily. The service sector in the second quarter of 2019 increased by 6.9% thanks to the strong growth of the service industry. Therefore, it is not surprising that tourism-related industries such as retail, transportation and accommodation continue to grow strongly, contributing to the prospects for good growth.

Vietnam welcomed 15 million tourists in 2018, and by mid-2019, the number of tourists to Vietnam has increased by 7.5% over the same period. The rising tourist trend is expected to continue in the second half of 2019, especially as the northern hemisphere enters the winter. HSBC believes that the growth of the service industry will remain high for the rest of the year, along with foreign currency and employment opportunities.

Manufacturing PMI index in June 2019 increased to 52.5 points, higher than the closing level of Q1 / 2019

As an open economy, Vietnam is not immune to the effects of global trade tensions. But looking at the future, HSBC thinks there are still many reasons to be optimistic. Manufacturing PMI index in June 2019 increased to 52.5 points, higher than the key level of the first quarter of 2019, it also reflected the increasing optimism in Vietnam’s manufacturing industry.

In the first quarter of 2019, total newly registered FDI and FDI into the manufacturing industry grew by 66% and 33% respectively. China has surpassed many other major investment partners of Vietnam, investment from China grew by 411% over the same period. This trend has been going on since the beginning of the year and will continue in the short term, from both Chinese and foreign investors.

In April 2019, LG announced that it would shift production of high-end phones to Hai Phong from the second quarter of 2019, so production in Hai Phong will account for about 10-20% of total smartphone production. Intelligent of LG. As production capacity is constantly increasing, HSBC believes that Vietnam’s production will still grow well, providing important support for economic growth. Vietnam’s GDP in 2019 will grow by 6.7%, according to HSBC calculations.

Trung Men
* Source: BizLive

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