CPTPP would create fierce competition in the domestic market in 2019.
According to calculations, CPTPP could help Vietnam’s GDP and exports increased by 1.32% and 4.04% to 2035 respectively. In general, the overall implementation of CPTPP is beneficial for Vietnam. If there are larger openings on services, the increase in GDP growth may reach 2.1%.
The textiles and footwear industry would be the sectors rated as having the highest benefit. The export growth rate of the textile and garment industry would increase from 8.3-10.8% due to greater price competitiveness in new markets in CPTPP, while maintaining the main market of the US and EU. Most light and labor-intensive industries still benefit from CPTPP. The agreement could create additional growth for this sector from 4-5% and the increase in exports could reach from 8.7-9.6%.
Due to the impact of CPTPP, the output growth rate of some industries may decrease, including animal husbandry, food processing and insurance services. Animal husbandry is a sector that is heavily affected by CPTPP due to its weak competitiveness. In agriculture, except for rice, the current tariffs of countries with livestock products are not high, so lowering tariffs in CPTPP does not create much export impact. The growth rate of the food processing industry decreased at 0.37% -0.52%. However, it helps to increase exports by 2.18% to 2.35%.
Vietnam macro-economic outlook for 2019 in numbers.
- GDP growth: GDP in 2018 surged at 7.08%, thanks to contributions from manufacturing and processing. Forecast of GDP growth in 2019 would reach 6.6 – 6.8%.
- Inflation: The average CPI in 2018 reached 3.54%, under the increasing pressure of gasoline, medical and food prices. CPI in 2019 is forecast at 3.8 – 4.0%.
- Monetary policy: Monetary policy in 2018 is prudent with M2 growth and credit decline sharply compared to 2017. It is forecasted that in 2019, monetary policy would continue to be carefully controlled by the State Bank, M2 growth and credit are forecast at 11-13% and 13-15% respectively.
- Exchange rate: VND depreciated by 2.4% in 2018 due to the influence of peripheral factors. The estimated depreciation in 2019 would be about 2.3 -2.5%.
By 2019, competitions in the e-commerce industry would be more intense.
2018 was a vibrant year of e-commerce development in Vietnam. With a number of users of more than 50 million, E-commerce in Vietnam is being highly appreciated in the international arena, located in the three countries with the fastest e-commerce development in the region. As forecast, with the growth rate of over 20% per year, the scale of Vietnam E-commerce market could reach 10 billion USD by the end of 2020.
The highlights of E-commerce 2018 can be summarized in 4 main keys.
- Firstly, the fierce competition among typical e-commerce exchanges such as Lazada, Shopee, Tiki, Sendo, Adayroi, etc.
- Second, online advertising was increasingly competitive.
- Third, non-cash mobile payment had developed strongly, reaching the goal by the end of 2020.
- Fourth, the war of delivery services among e-commerce transport units.