WB Country Director for Vietnam Ousmane Dione speaks at the release of the report in Hanoi on December 11, 2018. (Photo: vov.vn)

According to the bank, despite global challenges, Vietnam continues to gain sustainable growth while inflation is muted and the exchange rate is relatively stable.

Sebastian Eckardt, lead economist of the World Bank in Vietnam, said that Vietnam’s economic growth posted higher result than last year in terms of agriculture, industry, and construction. The manufacturing performance is good though there’s a decline in mining output and the services. Eckardt said despite this, the growth rate continues to be driven by the domestic demand. Domestic consumption contributed about 60% of growth in Vietnam. He added the investment was robust mostly driven by the private sector including the FDI sector.

The World Bank expects Vietnam’s economy to grow nearly 6.8% this year compared to the 6.3% projected for East Asia and the Pacific, said the report, entitled “Taking Stock: An Update on Vietnam’s Recent Economic Developments”.

This means Vietnam’s outlook remains robust despite growing external headwinds, supported by strong domestic demand and a dynamic export-oriented manufacturing sector.

Growth in the medium term is forecast to slow slightly to 6.6% in 2019 and 6.5% in 2020. Inflation is expected to remain muted, at about the State Bank of Vietnam’s target of 4%, given anticipated monetary policy tightening over the medium term.