Vietnam’s economic recovery gains traction, growth forecasts may move up

HANOI – ANZ Bank is maintaining its GDP growth forecast for Vietnam at 6.5% y/y for both 2015 and 2016, but says it sees upside risks to its growth outlook on the back of better than expected Q1 growth.

“Economic growth is usually slowest in Q1 and peaks in Q4,” ANZ says. “The increase in various activity indicators is supporting our view of a nascent recovery in domestic demand.”
Q1 industry growth in Vietnam was the fastest of any quarter over the past three years, in line with stronger growth in industrial production. Increases in retail and vehicle sales were also at their highest compared to previous years.
“The narrow trade deficit is driven by the increase in imports of machinery, indicating additional capacity in the export-oriented sectors,” ANZ says. Credit growth of 1.9% ytd in Q1, along with the gradually rising trend in interbank rates, points to improved demand for credit.” www.live.anz.com (ATI).