The country is projected to be the fastest growing market in Southeast Asia, which as a whole, will likely see growth remain at 4.5 per cent in 2020, amid high risks of a re-escalation in trade tensions between the U.S. and China, according to the latest report by the Institute of Chartered Accountants in England and Wales (ICAEW).

Regional growth has slowed since 2018’s 5.1 percent increase, with the U.S.-China trade conflict a key driver of the downturn, with trade uncertainty a key drag on manufacturing, exports and investment, the report said.

The exception has been Vietnam, which has benefited from some trade diversion effects caused by the trade war. However, the ICAEW report said it suspects Chinese goods have been re-routed via Vietnam to avoid higher tariffs.

Although the U.S. and China recently agreed on a ‘phase one’ deal, it is too early to celebrate. "Frictions between the two remain high and the bulk of tariffs already imposed are unlikely to be lifted anytime soon," said Sian Fenner, ICAEW economic advisor and a leading Asia economist.

As such, alongside slower Chinese domestic demand, the outlook for regional exports and private investment will remain challenging, she added.

According to latest figures from the General Statistics Office, Vietnam posted its highest Jan-Sept GDP growth in nine years at 6.98 percent, with manufacturing and services sectors leading the way.

The main growth motivators were manufacturing (up 11.37 percent), retail (up 8.31 percent), finance and banking (up 8.19 percent), and logistics (up 7.82 percent), according to the GSO.

The government targets growth of 6.6-6.8 percent this year.