Vietnam’s GDP growth to edge up this year

ADB: Vietnam’s GDP growth to edge up this year

Vietnam’s GDP is forecast to edge up this year and next, with inflation in the high single digits.
Vietnam’s gross domestic product (GDP) is forecast to edge up this year and next, with inflation in the high single digits, said a report issued by the Asian Development Bank (ADB).

At an April 9 press briefing to announce the ADB Report on Asian Development Outlook 2013, Dominic Mellor, an economic expert from the bank, said Vietnam’s GDP growth is forecast at 5.2 percent in 2013, picking up to 5.6 percent in 2014 if progress is made in strengthening the banking sector and recovery in major industrial economies gathers momentum in 2014.

Inflation is seen easing to 7.5 percent on average this year before quickening to 8.2 percent in 2014, he said, adding this view assumes reasonable weather for food production, a broadly stable dong exchange rate, and restrained policy stimulation.

He noted that the trade surplus is expected to climb to a record 12.5 billion USD in 2013 and the current account surplus to increase further this year before easing in 2014 as imports accelerate in tandem with GDP growth.

According to Dominic Mellor, despite challenges, Vietnam has remained an attractive investment destination in light of its growing working-age population and low labour costs. This is illustrated by an increase in FDI over the past decade.

Nevertheless, he noted, the country faces increased competition for FDI in Southeast Asia, particularly from Indonesia.

Vietnam’s ability to remain competitive and drive economic growth back up to 7-8 percent will depend in large part on the timely and decisive implementation of structural reforms to the baking and SOE sectors and the improvement of other aspects of the business environment, he said.

According to ADB Country Director in Vietnam Tomoyuki Kimura, Vietnam’s GDP growth ebbed to 5.0 percent in 2012, the lowest in 13 years.

Subdued economic growth prompted an easing of monetary policy last year, but lending was constrained by problems in the banks, he said.

He affirmed that sustaining foreign direct investment inflows and maintaining competitiveness requires intensified efforts to reform banking, state-owned enterprises and the business environment.-VNA

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