UNESCAP Says Vietnam Economy to Expand 8.3 per cent in 2007

The UN Economic and Social Commission for Asia and the Pacific (UNESCAP) predicted on April 18 that Vietnam’s economy would record a high growth rate of 8.3 per cent in 2007.

 

In the annual report released in Hanoi, the UN body said Vietnam will continue to track the high economic growth achieved in recent years. The economy grew by 8.4 per cent in 2005 before slipping slightly to 8.2 per cent in 2006.

 

Vietnam is regaining momentum thanks primarily to the development of textiles and service sectors, mainly tourism and banking, the report said.

 

UNESCAP also forecast the economy will expand rapidly, as a heavy increase in foreign direct investment will be poured into Vietnam upon the country joining the World Trade Organization (WTO). In 2006, FDI capital into Vietnam surged to a record US$10.2 billion, above the 2005 level of US$6.2 billion and an earlier peak in 1996 of US$9 billion.

 

WTO accession will help Vietnam curb inflation due to the decreases in import duties. The consumer price index (CPI) dipped to 7.5 per cent in 2006 from 8.3 per cent the year earlier.

 

The report also said Vietnam is striving to reduce state budget deficit from 5 per cent in 2006 to 3 per cent in 2006-2010.

 

With the “Surging ahead in uncertain times” report, the UN body signaled that the Asia-Pacific region would become a driving force for the world economy. It predicted real economic growth for the 39 developing economies in the Asia-Pacific region will slow to 7.4 per cent this year from 7.9 per cent in the previous year.

 

The organization, however, noted that the greatest challenges for the whole region for 2007 would be to manage foreign exchange rates and abolish gender inequality. (VNA)