Vietnam information technology report q2 2015

Q2 2015
www.bmiresearch.com
VIETNAM
INFORMATION TECHNOLOGY REPORT
INCLUDES 5-YEAR FORECASTS TO 2019
ISSN 2044-9631
Published by:BMI Research
Vietnam Information Technology Report
Q2 2015
INCLUDES 5-YEAR FORECASTS TO 2019
Part of BMI’s Industry Report & Forecasts Series
Published by: BMI Research
Copy deadline: March 2015
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CONTENTS
BMI Industry View 7
SWOT 9
IT SWOT 9
Wireline 11
Political 13
Economic 14
Operational Risk 16
Industry Forecast 18
Table: IT Industry - Historical Data And Forecasts (Vietnam 2012-2019) 18
Macroeconomic Forecasts 25
Economic Analysis 25
Table: Economic Activity (Vietnam 2010-2019) 29
Industry Risk Reward Ratings 30
Industry Risk Reward Index 30
Table: Asia Pacific Risk/Reward Index - Q2 2015 32
Market Overview 33
Hardware 33
Software 40

Services 48
Industry Trends And Developments 56
Regulatory Development 62
Table: Government Authority 62
Regulatory News 65
Competitive Landscape 68
International Companies 68
Table: Samsung Electronics 68
Table: Intel 69
Table: LG Electronics 70
Table: Global CyberSoft 71
Local Companies 72
Table: Sara Vietnam 72
Company Profile 73
FPT Software 73
Table: FPT Group Financials By Segment (VNDbn) 77
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Regional Overview 79
Demographic Forecast 83
Table: Population Headline Indicators (Vietnam 1990-2025) 84
Table: Key Population Ratios (Vietnam 1990-2025) 84
Table: Urban/Rural Population & Life Expectancy (Vietnam 1990-2025) 85
Table: Population By Age Group (Vietnam 1990-2025) 85
Table: Population By Age Group % (Vietnam 1990-2025) 86
Methodology 88
Industry Forecast Methodology 88
Sources 89
Risk/Reward Index Methodology 90
Table: It Risk/Reward Index Indicators 91

Table: Weighting Of Components 92
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BMI Industry View
BMI View: We maintain a positive outlook for the Vietnamese IT market in the latest update, but we
highlight increased downside risk from a tightening of domestic credit conditions into 2015 as a result of a
build up of bad debt. Credit markets could cause short-term disruption but our forecast for robust medium-
term growth in Vietnamese IT spending remains in place, with a forecast for a compound annual growth
rate (CAGR) of 11.2% 2015-2019. We expect growth will be driven by rising incomes, enterprise
modernisation and the policy environment put in place by the government. We also highlight larger
opportunities in the retail market where penetration of devices and services remains below the level in
neighbouring markets, which vendors will be able to tap as incomes rise. Meanwhile, Vietnam's
development as an outsourcing destination is a significant medium-term factor, with the services segment
expected to expand rapidly. There is also increasing momentum towards Vietnam becoming a global centre
for electronics production as wages rise in China and manufacturers look to protect margins by moving to
Vietnam, where wages are as little as a third of those in China.
Headline Expenditure Projections
■
Computer Hardware Sales: VND37.0trn in 2014 and VND39.6trn in 2015, rising to VND53.3trn in
2019, CAGR of +7.6% in local currency terms. Rising incomes and declining device prices, along with
PC subsidy schemes, will support demand growth across all three main device categories over the
medium term.
■
Software Sales: VND9.0trn in 2014 and VND10.1trn in 2015, rising to VND19.0trn in 2019, CAGR of
+16.2% in local currency terms. There are considerable opportunities in business software and security
solutions for vendors willing to accept narrow margins in a price-sensitive market.
■
IT Services Sales: VND13.7trn in 2014 and VND15.7trn in 2015, rising to VND29.2trn in 2018, CAGR
of +16.3% in local currency terms Increased domestic demand for cloud computing and outsourcing

services expected to drive outperformance.
Key Trends & Developments
A major recent development in the Vietnamese outsourcing market came in July 2014 when the Prime
Minister of Vietnam enabled state agencies to use outsourced information technology providers for the first
time, a ruling that came into effect in February 2015. It enables IT firms to provide software and technology
systems as service packages to the public sector. FPT Information Systems CEO Do Cao Bao stated that the
main IT services in Vietnam are system management, cloud software leasing and maintenance services as
the largest component at around VND4-5trn a year. It is these areas that are expected to generate the most
demand in the public sector, which BMI believes represents a significant new area of growth for vendors.
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However, confidence remains a major impediment to adoption. Managers are unsure of the benefits of IT
outsourcing, as well as having concerns about security and a loss of control over key processes. A report
from Grant Thornton International stated that only 12% of enterprises in Vietnam are open to outsourcing.
BMI expects outsourcing adoption to accelerate once awareness of the benefits is more widely spread, and
vendors ease manager concerns.
BMI expects virtualisation to be another prominent trend in the Vietnamese IT market over the medium
term as enterprises look to increase efficiency. This view was underlined by the March 2015 VMWare
virtualisation survey that reported that 91% of Vietnamese enterprises expected to virtualise at least 30% of
their IT infrastructure in the next two years. Resource utilisation optimisation and operational efficiency
were cited as the primary drivers of the virtualisation trend in Vietnam, while cost, business culture and lack
of information were the main barriers to software-defined data centre adoption. The survey revealed that the
top three IT priorities for Vietnamese enterprises in 2015 were disaster recovery and business continuity
(25%), ensuring IT security and data protection (29%) and reduction in costs (24%).
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SWOT
IT SWOT
SWOT Analysis

Strengths
■
Supportive policy framework and funding in place to promote the development of the
IT sector.
■
Vietnam's gradual integration into the global trade network via its accession into trade
organisations such as ASEAN and WTO, as well as bilateral agreements with Japan
and China.
■
The domestic IT market is in a rapid growth phase, with trade liberalisation and
growing affordability driving increased adoption among enterprises and consumers.
■
Expanding local hardware production industry with major international players such
as Samsung, Nokia, LG and Intel making large investments.
■
Vietnam is a preeminent global outsourcing destination, with a particular strength in
the software development industry.
Weaknesses
■
IT spend per capita is much lower than in neighbouring Thailand, reflecting a much
lower GDP per capita.
■
Highly cost-sensitive market, with 75% of software provided by lower-cost local
software vendors.
■
High level of software piracy, with a stall in the reduction 2011 to 2013.
■
Cyber security measures by the government have been pushed through with state
security measures, with potential human rights implications.
Opportunities

■
Decision in July 2014 to enable state agencies to use outsourced information
technology providers for the first time opens a new growth channel for vendors.
■
Low PC penetration means there is scope for vendors to tap first-time buyer market
as well as the upgrade/replacement market. Due to low penetration desktop and
notebook sales continue to increase despite competition from tablets.
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SWOT Analysis - Continued
■
Low-cost tablets are proving popular with consumers, with significant medium-term
sales growth potential as incomes continue to rise.
■
Vietnam is a popular destination for software development and IT services
outsourcing, with particularly strong growth potential from Japanese enterprises that
are turning away from Chinese based providers.
■
National IT Plan will drive spending on IT utilisation in areas such as e-government, e-
taxation and education.
■
Small- and medium-sized enterprises have much potential to increase spending on
basic solutions, including customer relationship management and security.
■
The government's drive to create an IT services industry over the next 15-20 years -
including the NATIF fund - is expected to be accelerate the development of local
enterprises.
■
Cloud computing awareness has risen fast and adoption is expected to accelerate
through 2014 and 2015, with virtualisation expected to be a significant growth trend in

the short-to-medium term.
Threats
■
Low-cost tablets from own-brand Chinese vendors a particular threat to low- and
mid-range notebook vendors. Falling prices may further undermine margins and
profitability after steep discounting.
■
Cyber security issues could undermine confidence in IT solutions and services, with
big data and cloud computing vulnerable.
■
Yen depreciation has hit the software outsourcing market by making exports less
competitive and eroding Vietnam's cost advantages.
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Wireline
SWOT

Strengths
■
Fixed-line penetration levels and internet user rates are high in major urban centres
such as Ho Chi Minh City, Hanoi, Danang and Haiphong.
■
Competition exists in fixed-line and internet access markets; VNPT faces competition
from several other state-owned companies and privately owned operators.
■
High levels of literacy and other demographic factors bode well for strong and
continued demand for wireline services over the next few years.
Weaknesses
■
Vietnam's fixed-line and internet access markets are dominated by state-controlled

operator VNPT.
■
Although alternative broadband infrastructures are currently being explored,
broadband growth continues to be highly dependent on DSL.
■
Low fixed-line penetration rates in rural regions limit the scope for DSL broadband
growth.
■
Although internet user growth is improving, rural Vietnam still has limited access to
internet infrastructure.
■
Broadband tariffs remain high, creating a barrier for low-income subscribers to
access.
Opportunities
■
The privatisation of VNPT could help to bring about increased investment revenue
and the arrival of new skills.
■
On a national level, broadband penetration rates remain low - this means that the
sector has considerable growth potential.
■
Significant opportunities exist to develop alternative broadband technologies,
including WiMAX, LTE and fibre; WiMAX and LTE internet services have the potential
to raise the level of internet user penetration in rural parts of Vietnam.
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SWOT - Continued
■
Draft Bill of Law on Telecommunication has been put forward for discussion at the
National Assembly Steering Committee. If passed, the bill will allow private

companies to build network infrastructure for the first time and will open up the
telecoms market to foreign investors.
Threats
■
Fixed-line sector may enter a period of decline, with potentially negative
consequences for DSL growth.
■
As the market for mobile data services grows, this could have potentially negative
consequences for the growth of fixed broadband services.
■
VTV's dominance in the pay-TV sector is holding back market development.
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Political
SWOT Analysis

Strengths
■
The Communist Party of Vietnam remains committed to market-oriented reforms and
we do not expect major shifts in policy direction over the next five years. The one-
party system is generally conducive to short-term political stability.
■
Relations with the US have witnessed a marked improvement, and Washington sees
Hanoi as a potential geopolitical ally in South East Asia.
Weaknesses
■
Corruption among government officials poses a major threat to the legitimacy of the
ruling Communist Party.
■
There is increasing (albeit still limited) public dissatisfaction with the leadership's tight

control over political dissent.
Opportunities
■
The government recognises the threat corruption poses to its legitimacy, and has
acted to clamp down on graft among party officials.
■
Vietnam has allowed legislators to become more vocal in criticising government
policies. This is opening up opportunities for more checks and balances within the
one-party system.
Threats
■
Although strong domestic control will ensure little change to Vietnam's political scene
in the next few years, over the longer term, the one-party-state will probably be
unsustainable.
■
Relations with China have deteriorated over recent years due to Beijing's more
assertive stance over disputed islands in the South China Sea and domestic criticism
of a large Chinese investment into a bauxite mining project in the central highlands,
which could potentially cause wide-scale environmental damage.
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Economic
SWOT Analysis

Strengths
■
Vietnam has been one of the fastest-growing economies in Asia in recent years, with
GDP growth averaging 6.6% annually between 2000 and 2013.
■
The economic boom has lifted many Vietnamese out of poverty, with the official

poverty rate in the country falling from 58% in 1993 to 17.2% in 2012.
■
Vietnam has been strengthening its trade and aid ties in a bid to increase exports and
diversify its export sector.
Weaknesses
■
Vietnam still suffers from fiscal deficits, leaving the economy vulnerable to global
economic uncertainties. The fiscal deficit is dominated by substantial spending on
social subsidies that could be difficult to withdraw.
■
The heavily-managed and weak currency reduces incentives to improve quality of
exports, and also keeps import costs high, contributing to inflationary pressures.
Opportunities
■
WTO membership and the upcoming ASEAN economic integration in 2015 should
give Vietnam greater access to both foreign markets and capital, while making
Vietnamese enterprises stronger through increased foreign competition.
■
The government has continued to move forward with market reforms, including
privatisation of state-owned enterprises, addressing the high level of bad loans in the
banking sector as well as liberalising the banking sector.
■
Urbanisation will continue to be a long-term growth driver. The UN forecasts the
urban population rising from 32% of the population in 2013 to more than 50% by the
early 2040s.
Threats
■
Although inflation has subsided in 2014, complacency by the State Bank of Vietnam
on this front could result in a decline in investment.
■

The potential for an escalation of political tensions with China over sovereign claims
to parts of the South China Sea could have a negative impact on the economy.
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SWOT Analysis - Continued
■
Market reforms could progress at a much slower pace as the government remains
cautious about ceding ownership to foreign investors.
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Operational Risk
SWOT Analysis

Strengths
■
Vietnam has a high number of university graduates with skilled degrees and a high
literacy rate for its income level.
• In addition to a number of regional and international flight options, Vietnam has an
extensive inland waterway system.
■
Strong contract enforcement capabilities increase security.
• Vietnam's rate of violent crime is generally low, and foreigners are unlikely to be
targeted.
Weaknesses
■
High labour costs increase overall operating costs, and difficulty in hiring foreigners
creates shortages of skilled labour.
• Underdeveloped rail capacity overburdens the road network.
• One of the worst tax administration systems in Asia.
• The police force is under-equipped and under-resourced in many areas.

Opportunities
■
Fairly high expenditures in secondary education by regional standards will help close
gaps in access to education.
• Vietnam is easily accessible from the main shipping routes, and growth in the number
of port facilities will provide adequate capacity.
• Declining trade barriers are making it easier to enter the market.
• Increased foreign participation in the banking sector will increase the availability of
funds for loans.
Threats
■
Unequal access to secondary education will result in a lower-quality workforce in
poorer regions.
• Vietnam's reliance on imported oil poses risks in the form of energy and fuel
shortages.
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SWOT Analysis - Continued
• Corruption and inefficiency in the legal system.
• Anti-Chinese violence, as seen in May 2014, could be a harbinger of wider political
and social unrest.
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Industry Forecast
Table: IT Industry - Historical Data And Forecasts (Vietnam 2012-2019)
2012 2013 2014e 2015f 2016f 2017f 2018f 2019f
IT market
value,
VNDmn 46,064,455 54,190,225 59,717,628 65,390,803 72,498,783 80,865,143 90,738,777 101,518,544
IT market

value, % of
GDP 1 2 2 2 2 2 2 2
Computer
hardware
sales,
VNDmn 29,250,929 34,139,842 37,024,930 39,561,436 42,411,788 45,688,806 49,452,633 53,297,235
Personal
computer
sales,
VNDmn 23,544,073 27,479,159 29,793,961 31,827,175 34,107,560 36,752,075 39,799,479 42,914,934
Software
sales,
VNDmn 6,550,366 7,705,850 8,969,588 10,135,575 11,817,302 13,827,939 16,242,241 18,983,968
Services
sales,
VNDmn 10,263,161 12,344,533 13,723,111 15,693,793 18,269,693 21,348,398 25,043,902 29,237,341
e/f - BMI estimate/forecast. Source: BMI Research
BMI considers the Vietnamese IT market to hold the potential for medium term outperformance, in APAC
and globally. We base this view on several factors of factors including supportive government policy,
forecasts for strong income growth, declining device prices, enterprise modernisation, Vietnam's large and
growing population, and investments in telecoms and retail infrastructure.
There is however short-term downside due to tightening credit conditions, but in our core scenario this will
not cause widespread disruption to market development. The medium term outlook is bright, and with the
IT market in Vietnam relatively undeveloped, the IT sector will account for a growing share of GDP over
the duration of our five-year forecast to 2019. We also highlight the development of Vietnam's local IT
industry, with software development and outsourcing services firms developing rapidly and positioned to
benefit from large foreign enterprises seeking lower cost locations over the medium-term. BMI forecasts
the IT market in Vietnam will expand at a compound annual growth rate (CAGR) of 11.2% forecast for
2015-2019 and the market expected to reach a value of VND101.5trn in 2019.
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IT Market Growth
(2012-2019)
Vietnam - IT market value, VNDmn
2012 2013 2014e 2015f 2016f 2017f 2018f 2019f
0
25,000,000
50,000,000
75,000,000
100,000,000
125,000,000
e/f - BMI estimate/forecast. Source: BMI Research
expects the downside from tightening credit conditions in Vietnam in H214 will result in growth in 2015
being slightly below the medium term trend. Further a worsening of the crisis could reassert a traditional
area of weakness in Vietnam, which had become a less significant factor as a result of partnerships between
banks and retailers formed in 2013. However, with the wider Vietnamese economy still on track to record
strong growth we expect the credit tightening is only expected to cause minor short-term disruption. We
forecast real GDP growth of 6.4% in 2015 and real growth of private final consumption of 6.5%, growth
rates that will support a buoyant retail hardware market given the relatively broad based complexion of
economic growth in Vietnam.
We forecast the PC market trend from 2014 will continue into 2015, with growth forecast for desktop,
notebook and tablet shipments as rising incomes and declining device prices promote first-time buyer and
upgrade sales. The influx of low-priced Chinese own-brand tablets since 2012 has deepened the market and
vendors in the notebook category have been lowering prices to compete with this influx, which has helped
make devices more affordable and boosted sales. There is evidence in H114 that hybrid notebooks have
carved out a significant niche and in H214 were beginning to challenge tablets by offering multi-use cases,
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a potentially significant trend in emerging markets where consumers are focused on value for money more
than the fashion cache of tablets.

Private demand could be negatively impacted by credit conditions, and under this scenario government
demand will become a more important source of sales. The Ministry of Information and Communication's
released a proposal in August 2013 to allocate at least 2% of the state budget to boosting the IT sector each
year. The government is actively promoting IT market development in several areas including PC subsidy
programmes, licensing software used by government agencies and enabling state agencies to use outsourced
information technology providers for the first time in 2014.
In terms of the enterprise sector in Vietnam, the outsourcing market continues to develop rapidly, and
domestic demand for outsourcing services should be boosted in 2015 by the government decision to allow
public authorities to outsource IT functions from February 2015.
Drivers
Positive economic fundamentals over the medium-term and declining device prices will drive retail
hardware market growth. Another supporting development is the investment taking place in the expansion
of both wireline and wireless broadband network infrastructure to rural areas, as well as upgrading capacity
of urban infrastructure and improving backbone networks. Additionally, telecoms operators such as Viettel
are emerging as significant distribution channels for notebooks as vendors seek tie-ups. In a country where
PC penetration remains low, particularly in rural areas, government digital divide programmes to boost
internet and digital utility in rural areas underpin addressable market growth and open PC ownership to a
growing number of rural inhabitants.
BMI's income stratification forecast provides additional insight for vendors operating in Vietnam's retail
hardware market. We expect economic growth in Vietnam to be relatively broad base, with all income
groups forecast to record income growth at a CAGR of 12% or more 2015-2019. However, we caution that
as a frontier market, incomes are very low for the majority of the population. We expect the middle 60% of
Vietnamese will have average incomes of USD1,423 in 2019, up from USD869. This is strong growth but
will predominantly boost demand for low-end and mid-range computing devices.
Potentially of more significance for retail hardware vendors is the income growth of the richest 20% in
Vietnamese society. We forecast a CAGR for the richest 20% of 12.3% 2015-2019, with incomes expected
to rise from USD2,746 in 2015 to USD4,493 in 2019. This growth will unlock PC purchases for households
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and individuals, and BMI identifies this as the primary opportunity in the PC market for profitable volume

growth.
Income Per Capita Breakdown
(2012-2019)
Poorest 20%, net income per capita, VND
Richest 20%, net income per capita, VND
Middle 60% of population, net income per capita, VND
2012 2013e 2014e 2015f 2016f 2017f 2018f 2019f
0
25,000,000
50,000,000
75,000,000
100,000,000
e/f - BMI estimate/forecast. Source: BMI, National Statistics Office
Another area of the IT market that will benefit from investment in networking infrastructure is the cloud
computing market. In March 2015 VMWare reported the results of its virtualisation survey found that 91%
of Vietnamese enterprises expected to virtualise at least 30% of their IT infrastructure in the next two years.
Meanwhile, in June 2014 VMWare reported the results of its cloud adoption survey in Vietnam. It found
that 80% of polled businesses considered cloud computing the number one priority for IT applications;
while 67% were confident cloud computing would have a major effect on business activities. VMWare
estimates that cloud adoption is growing faster in Vietnam than the wider region as a result of an absence of
legacy on-premises systems due to Vietnam's late-developer status.
The government is a major supporter of the development of the IT market in Vietnam through policy
initiatives and financing. Policies include promoting the use of IT by government agencies, citizens and
enterprises - as well as promoting the development of local industry, particularly in software and
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outsourcing services. Meanwhile, in early 2015 the Vietnamese government launched the National
Innovation Foundation (NATIF), with VND1trn (USD50mn) of registered capital. The government has set
NATIF the goal of fostering innovation and promoting commercialisation in the technology sector. The
areas that will be provided funding include IT, new materials research, biotechnology and automation.

A specific IT development initiative is the government's drive to grow the IT services industry over the next
15-20 years. The initiative is off to a strong start - in March 2015 Vietnam was awarded first position in the
world outsourcing location rankings in annual research from Cushman & Wakefield. Vietnam moved ahead
of China based on growth of its software development industry, but India remains the world's largest
business process outsourcing (BPO) destination. The momentum that could be garnered from Japanese
enterprises shifting business process and software development outsourcing to Vietnam could see medium-
term increases from European and North American demand. Meanwhile, with a report from Grant Thornton
International stating that only 12% of enterprises in Vietnam are open to outsourcing, there is also huge
growth potential domestically - particularly after the Prime Minister of Vietnam enabled state agencies to
use outsourced information technology providers for the first time in February 2015.
However, growth will depend on government progress on various business environment issues, including
copyright protection and combating cyber security threats. Further progress in combating software piracy,
which is still reported to be at higher levels than in China, India and Thailand in 2013, and progress seems
to have stalled since 2011. It is also taking steps to increase the penetration of information security
certification by distributing funds to enterprises and in September 2014 the Department of Network Security
was officially opened in Hanoi, with the remit of securing Vietnam's internet traffic. The key focus is on
comprehensively improving the standards of network security officials and officers. However there are
elements of the remit that have concerned political risk analysts (see Regulatory Developments section).
Segments
As a developing market with a large agricultural sector BMI believes there to be considerable scope for
vendors to market productivity enhancing products and solutions. The agricultural sector accounted for an
estimated 19.5% share of GVA in 2015 - a figure BMI expects to only decrease marginally to 19.3% in
2019 - and its share of labour is considerably higher. Mobile operator Viettel is a world leader in pioneering
smart agricultural products, including IT services such as information packages about produce prices,
disease warning, weather reports and analysis of coffee and cashew nut markets. These products generated
VND7bn a month in revenue - a far higher figure than that generated from the much hyped game
application development market. The success of Viettel's model has attracted interest from IT services
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providers, for instance Hanel has stated its intention to develop smart agriculture products. BMI expects the

agriculture vertical in Vietnam has medium-term growth potential as vendors innovate real-time updates for
producers.
Large Vietnamese companies are the most likely to buy packaged software from multinationals, which have
only around 25% of the local software market. In the large corporate sector, growing demand for digital
infrastructure projects in segments such as banking, telecoms and energy has attracted global IT services
leaders, such as IBM, to invest in Vietnam. Foreign investment, particularly by Japanese companies, in call
centres and other areas will help to grow the market.
Large state enterprises are also increasing spending on IT products and solutions, a trend that should
continue over the medium-term. For instance, in August 2014 FPT won a major IT services contract for the
development of a new ticket distribution system for the Vietnam Railway Corporation. FPT will build a
modern e-ticket distribution system, enabling customers to purchase tickets either online, via email or
through sale agents. The project is expected to take place over seven years, with three development stages,
and a total cost of around VND200bn.
Vietnam GVA By Vertical (%)
2015f
f = BMI forecast. Source: BMI, National statistics, World Bank, UN
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Meanwhile, smaller enterprises have a lower penetration of enterprise software, including ERP and security
software, but due to price sensitivity favour local solutions. The small- and medium-sized enterprise (SME)
market is an area of the market in which vendors can achieve growth as SME awareness of the benefits of
IT utilisation increase, encouraged by government initiatives to modernise firms and improve international
competitiveness. However, vendors will have to face the challenge of enterprises that are constrained by
low budgets and lack of access to credit. Promising SME verticals include discrete manufacturing and
consumer packaged goods, as well as hotels and property management. The solution areas with most
demand currently include security software and key applications such as customer relationship
management, enterprise resource planning and human resources management.
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Macroeconomic Forecasts

Economic Analysis
BMI View: We expect continued strong foreign direct investment (FDI), healthy export growth and ongoing
efforts by the government to improve macroeconomic fundamentals to keep the Vietnamese economy
growing strongly in 2015. Consequently, we forecast Vietnam's real GDP growth to accelerate to 6.4% in
2015, from 6.0% in 2014.
In line with our bullish economic outlook for Vietnam, the country's real GDP growth accelerated to an
impressive 7.0% in Q414 from the revised 6.1% in the previous quarter. This in turn brought real GDP
expansion for the year to 6.0%, surpassing the Bloomberg consensus estimate of 5.7% and marking
Vietnam as one of the brightest growth spots in Asia. We expect Vietnam's robust economic growth
momentum in 2014 to be carried over into 2015, largely on the back of greater foreign direct investment
(FDI) inflows, continued healthy export growth as well as continual efforts by the Vietnamese government
to improve macroeconomic fundamentals. As such, we forecast the Vietnamese economy to continue
growing at a strong pace of 6.4% in real terms in 2015.
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