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Economists are upgrading their growth projections for Vietnam after data this weekend showed the economy surged more than 7% in the third quarter.
Citigroup Inc (NYSE:C). revised its full-year forecast to 6.9% from 6.7% previously, on the basis of another solid performance in the fourth quarter. Analysts at Maybank Kim Eng Research Ltd. now see 7% growth for the year versus a prior call of 6.8%.
Solid exports and manufacturing growth underpinned the third-quarter gain of 7.31%, flouting a regional slowdown triggered by U.S.-China and Japan-South Korea trade tensions and waning global demand. The expansion was the fastest pace since the start of last year, and reflects growing foreign investment into Vietnam as businesses shift production from China to bypass higher tariffs.
Rising foreign direct investment and “buoyant domestic demand, as suggested by the recent robust retail sales growth,” will keep the momentum going through year-end and in early 2020, Maybank economists Linda Liu and Chua Hak Bin said in a research note.