Vietnam will grow at 7.6 percent this year, driven by newly signed free trade deals and rising foreign investment, HSBC has forecast.

According to the latest HSBC Global Research, inflation will be capped at 3.3 percent, below the 4 percent target set by the State Bank of Vietnam.

Vietnam’s trade will benefit from the FTAs it signed in 2020, the European Union–Vietnam Free Trade Agreement, the Regional Comprehensive Economic Partnership and the U.K.–Vietnam Free Trade Agreement, in the form of lower tariffs and greater access to some huge markets.

FDI continues to pour in since investors find Vietnam an attractive country. In the fourth quarter of 2020, industrial production returned to pre-pandemic levels, growing by 8 percent year-on-year, while GDP growth was higher than expected at 4.5 percent.

In the fourth quarter exports increased by 6.5 percent.

Consumer spending remained in positive territory in 2020 with an increase of 0.6 percent, while most countries in the neighborhood experienced a slump.

Full-year GDP growth was 2.91 percent, higher than HSBC’s forecast of 2.6 percent.

The government has set a GDP growth target of 6.5 percent for 2021.