Vietnam’s economy will grow faster this year than in 2017 and will see only a “minor” impact from President Trump’s trade tariffs, according to a senior government official.
The Southeast Asian nation’s government hopes to discuss “some sort of trade agreement” with the US—its biggest export market—to ease any barriers, said Truong Van Phuoc, head of the National Financial Supervisory Commission.
Vietnam is plowing ahead on free trade agreements with other countries as it seeks to maintain one of the world’s fastest economic growth rates, he said.
“The economy will grow faster this year with inflation being controllable and a pretty stable dong,” Phuoc, an adviser to Prime Minister Nguyen Xuan Phuc, said in Hanoi.
“Trump’s recent import tariff changes will have a minor impact on Vietnam, as we are diversifying our markets and products to boost exports.”
Vietnam’s benchmark VN Index has jumped about 16 percent this year and today closed at 1,138, the highest level since March 13, 2007. The gauge is forecast to reach 1,210 by the end of 2018, according to a survey of 10 strategists by Bloomberg.
Trump last week slapped a 25 percent tariff on steel imports and 10 percent levy on aluminum. Vietnam’s steel exports to the US totalled $104 million in the first two months of 2018, more than double a year earlier and about 16 percent of its total sales of the metal, according to data on the Vietnamese customs’ website.
The nation is now seeking to progress free trade agreements with other countries, including Japan and Europe, to help counter any impact from Trump’s tariffs.
Vietnam joined 10 other countries on March 8 to sign a Trans Pacific trade pact after the US President in 2017 pulled out of the agreement. Trump’s exit was seen as a blow to the country, which exports about a fifth of its goods to the world’s largest economy. But a global trade recovery and Vietnam’s young, low-cost workforce have been magnets for international investors like Nestle SA, which have opened factories there.
That’s helping underpin an economy which expanded 6.81 percent in 2017 and is estimated by the Prime Minister to grow 7.4 percent in the first quarter. Phuoc said the government aims to maintain gross domestic product growth at around 7 percent.
“Vietnam still has a lot of room to grow,” said Phuoc. “The government is taking solid steps to boost private companies, such as reducing the number of licenses, helping businesses to cut costs by getting permits faster, and more importantly, boosting investors’ confidence by dramatically intensifying its corruption fight.”
Trinh Xuan Thanh, former chairman of state-owned PetroVietnam Construction JSC, a unit of Vietnam Oil & Gas, was given a life sentence for embezzlement. To help the economy counter headwinds from rising protectionism in the US and other markets, PM Phuc has asked ministries to closely watch international markets and enforce plans to ensure government economic targets will be reached this year, according to Phuoc.