Experts forecast subdued economic progress
Experts forecast subdued economic progress
Viet Nam's economy will remain subdued for the rest of 2013 as bad debts and huge stockpiles of goods continue to hold the country back, predicted participants at a seminar on Thursday.
Vo Tri Thanh – Deputy Director of the Central Institute for Economic Management (CIEM) predicted that Viet Nam's economy would grow by between 5.2 to 5.5 per cent, at least until 2015, but stressed that it would be difficult to reach next year's national growth target of 6 per cent.
He said that collecting revenue for the State budget was also facing difficulties this year due to the Government's tax exemptions and the large number of businesses that have gone bankrupt, cut back or even halted production, while bad debts held by the banking sector remained the biggest problem.
Some said that the country's exports and industrial output have given several positive signals, but Thanh said industrial production remained poor and unstable, pointing out that the Purchasing Managers Index (PMI) for the production sector has dropped rapidly.
The country's exports in the second quarter of this year only rose by 16 per cent, which is lower than the 20 per cent recorded in the first quarter.
According to other commentators, the restructuring of the economy and banking sector along with measures to encourage social investment and favourable tax policies are likely to increase supply and put pressure on the consumer price index (CPI).
The country's economy is still being affected by the global economic downturn, while bad debt and outstanding debts in the construction industry have yet to be resolved.
Many said that the interest rate on loans is no longer a major concern, but businesses still find it difficult to access loans from commercial banks due to stricter administrative procedures.
Nguyen Ngoc Tuyen, director of the Institute of Finance and Economics, stated that stockpiled products in the remainder of this year may see a high increase and this could prove damaging to the country's economic growth.
The majority of economic analysts attending the seminar said that inflationary pressures on economic growth remain high, but have lessened.
Many international organisations have lowered their forecast of Viet Nam's inflation rate to between 6-7 per cent this year against previous predictions of between 7-9 per cent
Do Thi Ngoc – Deputy Director of the Price Statistics Department at the General Statistics Office said that inflation was no longer a major concern this year, as it has only risen by 2.4 per cent in the first six months of the year.
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