(VNF) – The conference on Asia Development Outlook held by Asia Development Bank (ADB) in Hanoi on Monday reveals the outlook of Vietnam’s economics in 2017-2018.

The session was chaired by Mr. Eric Sidgwick, Country director of ADB in Vietnam and Mr. Aaron Batten, Country Economist for Vietnam.

According to ADB, three main trends of growth which are likely to take place in Vietnam in 2017 - 2018 period are: the strong flows of FDI with new committment and more disbursement, the progress toward region-level manufacturing hub and the rise of the middle-class leading to the establishment of new retail and wholesales businesses.

Mr. Eric Sidgwick (centre) and Mr. Aaron Batten (left) presenting Vietnam economic outlook 2017. (photo: P.Y)

According to ADB, GDP growth is projected to be higher at 6.5% in 2017 and 6.7% in 2018, thank to the robust take-off of manufacturing and services sector.

Regarding the questions whether Vietnam's FDI will be affected by the change of US new administration and the Brexit-effects, Batten stated, there will be no major impacts hindering the flows of FDI to Vietnam in coming period, as Vietnam’s source of FDI have been well persified, in which the top 3 largest investors to Vietnam are from Korea, Singapore and China.

Meanwhile, agriculture is expected to enjoy slight growth this year, given the outlook for higher global food prices and assuming a return to normal weather. The target set by the government is at 2.7% in 2017.

Despite the bright color of the big picture, in order to achieve the upper-middle-income status by 2030, better measures for sustainable and solid growth must be taken into account, ADB pointed out.

Particularly, improvement in agricultural production, which account for 18% of the country's GDP, is vital to growth, ADB suggested.

According to ADB, putting aside abnormal weather conditions, low labour productivities and intensive resource utilization are key factors hindering agriculture growth (since 2011, the growth rate has been stagnant at around 2% per annum.)

Solution recommended by ADB, besides action programmes to cope with climate change, Vietnam should focus on three areas, which are creating greater competition in the supply chains, consolidating investment in rural infrastructure and strengthening environmental protection.

In details, market structure and competitiveness should be transformed as the dominance of state-owned enterprises have been suppressing farm incomes and incentive for investment.

On this issue, Sidgwick offered specific measures to improve agricultural productivity. According to him, the farmers might consider persify their range of crops, which mean focusing more on higher-value crops. For staple food like rice, the output might be moderated to the sufficient level for food security.

Regarding rural infrastructure development, ADB advised the Vietnam goverment to further invest in irrigation, transportation, postharvest handling and storage. Essentially, according to Sidgwick, advanced technology should be adopted in farming production, in order to increase productivities while reduce negative affects on environment.

Overall, from ADB’s perspective, the application of technology is the key to ensure sustainable agriculture growth in the long terms, as recently, the growth of the sector has been heavily depending on the excessive use of land, water and fertilizer.

Also at the conference, the two experts from ADB answered several questions regarding public debts, growth trend in construction sectors, power production and banking profitability./.

( Phi Yen )