Vietnam Infrastructure Report Q2 2016
BMI View: The positive outlook for Vietnam's construction sector is supported by strong economic growthand regulatory changes. We expect residential and non-residential building segment to outperform in thelong term, as real estate and manufacturing sectors will continue to benefit from increased foreigninvestment.
Latest Updates And Structural Trends
Our Country Risk (CR) team maintain their forecast for Vietnam's real GDP growth to come in at 6.6%in 2016 (from 6.7% in 2015), which would make Vietnam one of the fastest growing economies in Asia.
In turn, our outlook for Vietnam's construction industry remains positive and we forecast real growth of5.9% and 6.3% in 2016 and 2017 respectively.
Vietnam's transport sector has great potential and will remain a key focus of the country in 2016. In thelong term, we expect the residential and non-residential building industry to outperform between 2017and 2025. The sector will grow at an annual average rate of 6.6% during this period due to sustainedurbanisation, rapid industrialisation, growing tourism sector and measures to reduce restrictions onforeign ownership of property.
We believe consistent fiscal deficits in Vietnam as a result of a lack of spending prudence couldundermine much needed infrastructure development and remain a blemish on the strong economicgrowth.
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