The Asian Development Bank (ADB) has revised down its growth forecastfor Vietnam in 2011 to 6.1 percent from 7 percent projected inSeptember 2010.
At a press briefing to introduce its AsianDevelopment Outlook (ADO) 2011 in Hanoi on April 6 the bank alsosaid it expected growth to pick up again to 6.7 percent in 2012 as amore stable economic environment stimulates consumption and investment.
Meanwhile,inflation is anticipated to remain high through 2011 averaging 13.3percent, before moderating to average 6.8 percent in 2012.
Inhis opening speech, ADB Country Director for Vietnam , Ayumi Konishi,said the Vietnamese government is commented for the timely introductionof comprehensive policy measures to control inflation and restore macroeconomic stability under Resolution 11 in February.
Ifthe Government effectively implements the resolution and communicatesits implementation process to the people, the country’s macro economicstability can be restored, he said.
The effectiveimplementation of Resolution 11 will slow Vietnam ’s near-termeconomic growth rate, however, the Government has to implement it as ittakes time for the inflation numbers to come down, he added.
”Becausemonthly inflation rate was very low between April and September lastyear, it will not be easy for the month on month rate to come below thelast year’s level - this means that even with successful implementationof Resolution 11, Vietnam’s inflation rate measured by “year on year”basis, will still continue to increase, and not decrease, in the nextfew months,” said the ADB Country Director.
He also addedbringing down “year on year” inflation rate to a single digit by the endof this year will require the average monthly rate to below 0.4percent.
“Focusing on improving corporate governance andoperational efficiencies of state owned enterprises will enable them tocontribute effectively to Vietnam ’s sustainable rapid economicgrowth,” Konishi said, suggesting the Southeast Asian country focus onimproving the efficiency of its economic systems, in order for it todeepen its regional integration and global value chains.
“Stability and efficiency will be the foundation of Vietnam ’ssustainable economic growth, and we are very confident about the strongpotential of Vietnam over the medium term,” he said.
Accordingto analysis, the State Bank of Vietnam (SBV)’s recent adjustment ofVietnamese currency has great impacts on the market. Raising petrolprice is also necessary as petrol price in Vietnam was much lowerthan the world’s level before the adjustment.
There is alsoa risk that the supply of manufactured components from Japan forVietnam ’s export industries could be disrupted by the impacts of the11 March earthquake.
The ADO noted acceleration ofVietnam ’s growth to 6.8 percent in 2010, supported by global economicrecovery and accommodative monetary policy. Strong consumption growth of9.7 percent stimulated private sector investment, and industry sectorexpanded by 7.7 percent and services grew 7.5 percent.
Theimmediate challenge is to follow through on the policy tightening whilethe longer term one is to reinvigorate structural reforms, according tothe ADO./.
At a press briefing to introduce its AsianDevelopment Outlook (ADO) 2011 in Hanoi on April 6 the bank alsosaid it expected growth to pick up again to 6.7 percent in 2012 as amore stable economic environment stimulates consumption and investment.
Meanwhile,inflation is anticipated to remain high through 2011 averaging 13.3percent, before moderating to average 6.8 percent in 2012.
Inhis opening speech, ADB Country Director for Vietnam , Ayumi Konishi,said the Vietnamese government is commented for the timely introductionof comprehensive policy measures to control inflation and restore macroeconomic stability under Resolution 11 in February.
Ifthe Government effectively implements the resolution and communicatesits implementation process to the people, the country’s macro economicstability can be restored, he said.
The effectiveimplementation of Resolution 11 will slow Vietnam ’s near-termeconomic growth rate, however, the Government has to implement it as ittakes time for the inflation numbers to come down, he added.
”Becausemonthly inflation rate was very low between April and September lastyear, it will not be easy for the month on month rate to come below thelast year’s level - this means that even with successful implementationof Resolution 11, Vietnam’s inflation rate measured by “year on year”basis, will still continue to increase, and not decrease, in the nextfew months,” said the ADB Country Director.
He also addedbringing down “year on year” inflation rate to a single digit by the endof this year will require the average monthly rate to below 0.4percent.
“Focusing on improving corporate governance andoperational efficiencies of state owned enterprises will enable them tocontribute effectively to Vietnam ’s sustainable rapid economicgrowth,” Konishi said, suggesting the Southeast Asian country focus onimproving the efficiency of its economic systems, in order for it todeepen its regional integration and global value chains.
“Stability and efficiency will be the foundation of Vietnam ’ssustainable economic growth, and we are very confident about the strongpotential of Vietnam over the medium term,” he said.
Accordingto analysis, the State Bank of Vietnam (SBV)’s recent adjustment ofVietnamese currency has great impacts on the market. Raising petrolprice is also necessary as petrol price in Vietnam was much lowerthan the world’s level before the adjustment.
There is alsoa risk that the supply of manufactured components from Japan forVietnam ’s export industries could be disrupted by the impacts of the11 March earthquake.
The ADO noted acceleration ofVietnam ’s growth to 6.8 percent in 2010, supported by global economicrecovery and accommodative monetary policy. Strong consumption growth of9.7 percent stimulated private sector investment, and industry sectorexpanded by 7.7 percent and services grew 7.5 percent.
Theimmediate challenge is to follow through on the policy tightening whilethe longer term one is to reinvigorate structural reforms, according tothe ADO./.
