The Asian Development Bank or ADB in its revised outlook report forecast that Vietnam’s economy will grow 8.3 per cent this year and 8.5 per cent next year, to be fuelled by robust industrial and service growth and private sector, the government said on its website.
In the revised economic outlook, the ADB has raised the growth forecast of Asia in 2007 to 8.3 per cent from 7.6 per cent. Regarding Vietnam’s GDP growth rate, it normally grows sharply in the second half based on rapid disbursement.
Gem Lao-Araya remarked that the WTO accession is pushing Vietnam to deeply integrate into the global economy, encourage foreign investments and help maintain the continued internal reforms.
With growing foreign investments since joining the WTO body in January of this year, Vietnam saw robust growth in industrial production (12.4 per cent) and services [including finance (10.4 per cent) and hospitality (12.7 per cent)] and private sectors (20.5 per cent) doubling the GDP growth rate, which will be a continued drive, the ADB’s report said.
However, The ADB country director to Vietnam, Ayumi Konishi warned of the inflation, a real concern the government of Vietnam should be cautious in adopting measures to cope with.
The important thing is Vietnam should step up its continued reforms and simplify procedures, Ayumi Konishi noted.
Dao Viet Dung, staff of ADB’s Economic and Management said that the current inflation is a concern but not at alarming level. ADB predicted that Vietnam will tame its inflation at 7.8 per cent this year and to be down to 6.8 per cent next year.
Vietnam is forecast to have incurred growing trade gap of US$9 billion this year, which stems from rapid domestic consumption, however, it is not a real concern, the bank said.
Vietnam needs more foreign investments and advanced technology to industrialize its economy by 2020, however, it’s essential to effectively use the growing inflow of capital from outside and at home, domestic observers analyzed, because disbursement of infrastructure projects remain at snail speed. Removing administrative cumbersome procedures should be a must along with upholding the fight against the rampant corruption, they said.
In the January-August period, Vietnam was estimated to have attracted US$8.3 billion, up 40 per cent on-year. Of the sum, US$7.1 billion came from 814 new FDI projects and the rest from capital expansion of 247 existing projects, according to the Ministry of Planning and Investment (MPI).
The report also pointed out that booming domestic consumption in China and India will lead to robust economic growth in Asia this year and next in spite of turmoil on global credit markets and a US slowdown, the ADB has forecast.
Excluding China and India, which represent 55 per cent of developing Asia’s gross domestic product, the ADB forecast growth of 5.7 per cent this year and 5.6 per cent in 2008.
Mr Ali argued that Asia’s ability to weather a US downturn stemmed from its booming domestic consumption, the build-up of US$2,600 billion (€1,875, £1,303bn) in reserves, and more mature and healthy financial institutions and markets. He said “there was much less need for Asia to tap global credit markets than 10 or 20 years ago”. (Local sources)
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