Illustrative photo. (Source: VNA) Hanoi (VNA) –Vietnam will achieve its 2017 goal of 6.7 percent growth in gross domesticproduct (GDP), higher than 6.21 percent in 2016, due to the efficiency of itsreforms, say experts.
The National FinancialSupervisory Commission of Vietnam (NFSC) says this year, Vietnam’s economy willimprove due to the reform of institutions and of the investment environment, aswell as the price recovery of energy and farming products on the world market,creating new impetus for the private sector.
Meanwhile, the WorldBank (WB) and Asia Development Bank (ADB) have forecast that Vietnam’s GDPgrowth will reach 6.3 percent for this year, and the International MonetaryFund (IMF) set that figure at 6.2 percent.
The National Centre forSocio-economic Information and Forecast (NCIF) under the Ministry of Planningand Investment has two scenarios for domestic economic development this yearbased on the impact of the Government’s directions and an IMF forecast of globalGDP growth of 3.4 percent.
According to the morelikely first scenario, the domestic economy will remain stable and developmentand local investment will keep improving. Vietnam will benefit from its globalintegration to improve exports and investment. That would translate into 6.44percent GDP growth and inflation of 5 percent in 2017.
The second scenarioforesees 6.72 percent GDP growth and inflation of 6 percent if it further improvesthe structure and efficiency of the economy.
Policy management as wellas legal and investment environment reforms in 2016 have begun to have aneffect, the NCIF says. The consumption index increased slowly and steadily. TheState implemented flexible management of monetary and exchange rate policies,presaging an average basic interest rate of 6 per cent in 2017. The nation isforecast to achieve its money supply and credit growth goals.
Economic expert Vu Dinh Anhsays the exchange rate between the Vietnamese dong and US dollar will fluctuatein 2017, in accordance with economic and financial changes in the world,reports the Tien Phong newspaper.
This year, Vietnam needsmore active and flexible exchange rates, Anh says. The value of the Vietnamesedong can suffer from growth of inflation, while import volume and the price ofpetrol and other goods will increase.
Le Xuan Nghia, a memberof the National Financial and Monetary Policy Advisory Council, says thecouncil predicts interest rates hikes of 1-2 percent, depending on directionsfrom the State Bank of Vietnam, reports the Giao thong newspaper.
Rate hike pressure willcome from inflation and an increase of basic salaries, from three expectedinterest rate hikes by the Fed, from interbank interest rates moving up andfrom an upward trend of Government bond interest rates, Nghia says.
In addition, theincrease in interest rates could be due to the trade deficit reaching 4-5billion USD this year, increases in the price of the US dollar, and China’sadjustment of exchange rates, he says.
Economic expert Vo TriThanh says Vietnam’s economic growth next year will be boosted by theprocessing industry, foreign direct investments, and the construction andservices sectors.
In 2017, the agriculturesector will improve, while the construction sector will still face many difficulties.The property market will not experience a bubble but Việt Nam will not be ableto attract as much foreign investment as in 2016, he says.
The Government has seteconomic development targets of 6.7 percent GDP growth, 4 percent inflation andexport value growth of 6-7 percent for 2017.
To reach the goals,experts say, the Government will have to stabilise the macro economy, improveinvestment and business environments, and implement efficient economicrestructuring to achieve greater productivity, higher quality and competitiveability.
The Central Institute ofEconomic Management (CIEM) says the Government should continue renovation ofthe micro economy. It should complete regulations guiding implementation of theamended Law on Investment and the Law on Enterprise, abolish unsuitablebusiness conditions and simplify remaining business conditions.
The Government shouldencourage the private sector to join in formulating investment and businesspolicies, complete tariff calculations appropriate for international standardsof transparency, according to the CIEM. Vietnam needs to take advantage of freetrade agreements to promote exports and deal with the challenges of climatechanges and environmental pollution which will impact mid- and long-term economicgrowth.
The nation will alsoface many challenges in reaching economic development this year and beyond.These include slow growth in the agriculture sector, economic growth dependenton the FDI sector, slow restructuring in some sectors, financial systemdependent on the banking sector and difficulties in reducing lending interestrates.-VNA
