Foreign direct investment (FDI) inflows in Vietnam is expected to sharply increase in the 2014-15 period as the stable economy would create favourable conditions for the flow.

The National Financial Supervisory Committee (NFSC) last week released the latest forecasts for the economy in the 2014-15 period, showing that the FDI would see a high growth rate because of world economic improvement.

The World Bank earlier predicted that the world economy would have a growth rate of 3 percent and 3.3 percent in 2014 and 2015 respectively, much higher than 2.2 percent this year.

In addition, the committee said FDI attractions would be higher as the Trans-Pacific Partnership Agreement (TPP) would be signed in 2015.

It added that domestic private investment would also be improved because supporting policies will be brought into play in the next few years, while solutions to restructure the banking sector and resolve bad debts would upgrade the financial system.

Exports are forecast to continue at a high growth rate due to FDI projects, and would be momentum for the economy, the NFSC said.

However, the committee said the economy would be challenged by risks of public debt in Europe and decreasing growth in China and India.

Domestic enterprises would still face difficulties, especially in the agricultural sector. The State budget balance would be limited, causing capital shortage for development.

It also said Vietnam's economy is expected to grow by 5.6-5.8 percent and 6.0-6.2 percent for 2014 and 2015, respectively.

The NFSC said total social investment capital would have to reach 30-31 percent of GDP in 2014 and 2015; credit growth at 15 percent and exports at 12-14 percent in 2014 and 13-15 percent in 2015, in order to achieve the above mentioned GDP growth rate.

The committee also sees inflation of around 7 percent in 2014 and to fall to 6.5 percent in 2015. Its forecast for this year's GDP growth is 5.3 percent.

The outlook is given based on business and operation results in the first eight months of this year and forecasts about the global economic situation given by credit institutions worldwide.-VNA