WB: Vietnam yet to benefit from global recovery
WB: Vietnam yet to benefit from global recovery
While the global economy has seen recovery signs, Vietnam’s economic growth rate is expected to remain low in the coming years, according to the World Bank (WB).
The nation’s economic growth rate is forecast at 5.4%, 5.4% and 5.5% in 2014, 2015 and 2016 respectively, according to a report announced by WB’s Andrew Burns at a seminar with the Central Institute for Economic Management (CIEM) on Tuesday.
Most other nations in Southeast Asia are expected to have higher growth rates than Vietnam. Cambodia is projected to reach an average growth rate of 7% annually, Laos from 7.7-8.1%, the Philippines 6.5-7.1% and Indonesia 5.3-5.5%.
China is expected to post up a growth rate of 7.7% in 2014 and 7.5% in the following two years.
WB said that the global economy would grow by 3.2% this year and rise to 3.4% and 3.5% in 2015 and 2016 respectively. The figures are higher than the 2.4% in 2012.
This is good news. A major part of the growth rate will be contributed by high-income countries who have recovered after many years living under adverse impacts of the financial crisis, Burns said.
Vietnam was among few nations in the world posting credit growth ratio of 121% to gross domestic product (GDP) in the 2007-2012 period. The credit growth rate would fetch financial risks in the following years, Burns warned.
Concerning which foreign exchange policies Vietnam should choose after many years of maintaining the dong-U.S. nominal exchange rate, Burns said the nation should not make abrupt changes.
The central bank has been successful in raising foreign reserves but the situation of Vietnam is still critical.
The long-term goal is flexible forex rate management for the open economy of Vietnam. However, this is a complicated process and more general conditions in the country are needed, he said.
Meanwhile, the wrong allocation of financial resources, manpower and land remains a traditional challenge for Vietnam’s economic growth, said Vo Tri Thanh, CIEM deputy director.
Many experts at the seminar said that they had yet to see motivation for Vietnam to a make a breakthrough in the coming years. Meanwhile, fiscal and monetary policies have been pushed to the limit.
vietnamnet
