Industrial & External Activities Strengthen In April

Economic Research	3 May 2017
Vietnam
Economic Update
Industrial & External Activities Strengthen In April Vietnam’s industrial and external activities gained pace in April, which suggests that its economy is maintaining a relatively robust pace moving into 2Q17. Looking ahead, we expect Vietnam’s real GDP to grow by 5.9% YoY in 2017, albeit at a more moderate pace compared with +6.2% in 2016. This is premised on:                i.      Resilient exports due to participation in free trade agreements (FTAs);               ii.      Strong inflow of foreign direct investments (FDI);              iii.      Robust private investment;              iv.      Economic restructuring and institutional reform. Industrial production (IPI) picked up in April, on account of a quicker growth in manufacturing activities and a smaller decline in mining output. Export growth gained pace during the month amid a pick-up in the growth of exports from the foreign direct investment (FDI) sector. By commodity, the acceleration was on the back of mining and manufacturing exports. Retail sales picked up during the month, supported by a quicker rate of growth in the hotel & restaurant and services sectors. Headline inflation rate eased in April, mainly due to lower costs of food, foodstuff and transportation. We expect full-year inflation to pick up to 3.5% in 2017, from +2.7% in 2016. Economist:  Vincent Loo Yeong Hong  | +603 9280 2172 Economist: Aris Nazman Maslan | +603 9280 2184