Vietnam sees GDP growth of 6.2% for 2016

The GSO said on December 28 that though the growth rate for 2016 is below last year’s rate of 6.7% it is still considered a success given unfavourable global trends and a series of natural and environmental disasters during the year.

The southern Mekong Delta, the country's main rice growing region, said the GSO, suffered the worst drought in nearly a century followed by salt water intrusions that crippled agriculture output.

In addition, toxic chemicals dumped into the sea last April by a steel mill in central province of Ha Tinh, owned by a unit of Taiwan-based Formosa Plastics Group, ravaged the region's marine industries.

This is the first slowdown in annual growth since 2012 and below the 7% growth that was forecast at the beginning of the year.

The World Bank in a report earlier this month said the Vietnam economy remains resilient, thanks to robust domestic demand and export-oriented manufacturing. It said the country’s medium-term outlook remains favourable, with GDP expected to expand by 6% this year.

Meanwhile, both Capital Economics and Credit Suisse think 2017 will be another solid year for the Vietnam economy. Capital Economics expects growth of 7% in 2017, while Credit Suisse sees growth of 6.2%.

But the country of 93 million has far to go in developing strong monetary and financial policies, leaving it vulnerable to global downturns.

The country’s manufacturing sector has gained in recent years from the country's participation in the Trans-Pacific Partnership, a trade pact led by the US.

However, President-elect Donald Trump's opposition to the plan could derail the foreign direct investment that has been flowing into the country in hopes of gaining preferential access for exports to the US and the other TPP Pacific Rim markets.