HSBC forecast that credit growth will be 10%, lower than the State Bank of Vietnam (SBV)’s goal for 12-14%. Since early this year, credit has expanded 3.6% from the end of 2013 and about 11% on year.

HSBC explained a paradox regarding Vietnam’s still sticky GDP growth despite weak credit expansion. Manufacturing is one of the reasons why the economy has been growing at a 5% to 5.5% in recent years.

By July 2014, exports are holding the economy up, expanding 14.1%. The manufacturing sector is expanding solidly this year, albeit with some deceleration. Since December, HSBC manufacturing PMI has been above 50. With sluggish credit growth, inflation will remain contained. The SBV will keep the open market operation (OMO) rate steady at 5% for the rest of the year.

The recent uptick of employment suggests that producers are expecting a rebounding US and China to boost demand for Vietnam-manufactured goods.

HSBC reported that the bounce in external demand, especially in quarter four 2014, should boost the manufacturing sector further, HSBC also forecast continued growth next year, as new FDI investment begins to commence operations as well as a rebounding of the global environment.