Economists are upgrading their growth projections for Vietnam after data released last weekend showed the economy surged more than 7% in the third quarter, Bloomberg reported. 

Citigroup 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 US-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.

The Asian Development Bank (ADB) previously retained its growth forecast for Vietnam’s economic growth at a “healthy rate” of 6.8% and 6.7% in 2019 and 2020, after growing robustly by 7.1% last year. 

While sharing the same view with other forecasts that Vietnam’s economy remains healthy thanks to continued strength in domestic demand and sustained inflows of foreign direct investment, ADB Country Director for Vietnam Eric Sidwick noted further escalation of the US-China trade tension and continuing global economic slowdown could shrink global trade, which will adversely impact the country’s trade performance and economic growth. 

According to the General Statistics Office (GSO), Vietnam’s GDP expanded 7.31% year-on-year in the third quarter (Q3), higher than the growth rate of 6.82% in Q1 and 6.73% in Q2 this year. 

Overall, Vietnam posted year-on-year GDP growth of 6.98% in the first nine months of 2019, the highest nine month growth rate of the last nine years.