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Vietnam economy forecasted to grow in 2014

Fri, 18 Apr 2014. Last updated Thu, 25 Jun 2015 08:42

As global economy is having positive changes, Vietnam economy will be definitely boosted. It is expected to increase 5.6 percent in this 2014 thanks to the recovery of the United States and Eurozone in banking reforms.

In the context of global economy depression and national challenges, VN economy has actively changed in right orientations with the target of stabilizing macro economy, remaining the growth rate, enhancing economic restructure, ensuring security and social welfare, foreign affairs, and integration.

Based on general targets of Vietnam economy, the Vietnamese government announced basic economic goals in 2014, including GDP growth rate of 5.8-6 percent, 10 percent bigger of exports, total capital of social investment and development of 30 percent in total value of Vietnam GDP, etc. Besides, some great balances of this economy need guaranteeing in 2014 such as labor force and employment, State budget, development capital, import and export, international payment, electricity and eatables.

 

Chart on real Vietnam GDP per Capita

 

According to Vietnam economy news, in the report of the Asian Development Outlook 2014, Vietnam economic growth rate is predicted to account for about 5.8 percent in 2015. Meanwhile, the inflation is forecasted to decrease from 6.6 percent in 2013 to 6.2 percent. In addition, food production is reasonably assumed stable; policy stimulation is moderate, and depreciation of the dong is slight. However, inflation is predicted to be 4 percent bigger in 2015 as activity of economy picks up.

In this report, the progress in reforming financial sector includes efforts of the State Bank on supervising lending, merger and restructure of several weaker banks, and making restrictions on foreign investment in banks less tight. Moreover, new standards of loan classification and provision were given in this report with a purpose of narrowing the gap in international norms.

Speaking at the meeting of releasing this report, Mr. Tomoyuki Kimura, the country director of Vietnam-based Asian Development Bank said that speeding up resolving non-performing loans progress was likely to require setting targets and timelines for closing the rest gap between national and international standards, along with enhancing capacity of enforcing agencies. The report also highly appreciated the efforts of government on developing a single legal framework for private sector investment in infrastructure. As mentioned in the World Economic Forum, the quality of infrastructure in almost economies in Southeast Asia such as Malaysia, Thailand and Indonesia has more advanced technology than that of Vietnam.

To upgrade the necessary infrastructure system of supplying electricity and water, improving transportation, and standardizing sewerage by 2020, Vietnam’s government has to provide an amount of US$170 billion. However, the country’s public funding and official development assistance are predicted to meet only half this amount. The government’s spending becomes narrower as a persistent fiscal deficit, which averaged 5 percent of gross domestic product (GDP) in the 2010–13 period.

With above-mentioned targets, Vietnamese government and functional departments have to determine their duties, orientations on developing industries, pushing up economic restructure along with reform growth model of all economic sectors to stabilize Vietnam economy in 2014 and years to come. To specify, commerce and investment need enhancing, especially appealing more capitals of ODA and FDI, using monetary and fiscal policies effectively. In addition, promoting industries of manufactures, agriculture and services, particularly boosting marine economic development; enhancing enterprise support, creating a favorable business environment and greater equality for private sectors, small and medium enterprises are focused. Besides, developing human resource and promoting the development of science and technology need strengthened to serve the goal of socio-economic development.