At a recent seminar entitled "Prospects for Vietnam's Economy in 2014: Resonance Policy Effect" organised by the Ministry of Planning and Investment, participants put forth several scenarios for Vietnam's economy. Report byVietnam Business Forum.

World economy still potentially facing risks

World trade may continue to recover strongly. "The level of recovery forecast for 2014 is 4.5 percent, compared to 2.5 percent in 2013", said the representative of the National Centre for Socio-Economic Information and Forecast of the Ministry of Planning and Investment.

However, the monetary and financial sector is still bearing high potential risks. According to the International Monetary Fund (IMF), in most economies, fiscal deficits tend to rise. This reflects the fact that the economic environment is weaker. During 2014, world commodity prices will continue a downward trend.

According to the International Labour Organisation (ILO), the labour market will continue to be grim in 2014. The global unemployment rate is forecast to continue to rise to over 6 percent, approaching the threshold level of 205 million people, compared with 202 million of people in 2013.

According to the National Centre for Socio-Economic Information and Forecast of the Ministry of Planning and Investment, the whole picture of Vietnam's economy in 2 years from 2013 to 2014 comes with economic recovery, but it will be difficult to achieve high levels in 2014 and 2015.

Inflation is likely to be controlled to single digits. The financial and monetary policy of 2014 and 2015 will focus on maintaining low interest rates from 10 percent to 13 percent, enabling the businesses to make loans for business expansion.

The investment can be improved as compared with the period of 2011 and 2013. Exports will continue to rise steadily and imports are expected to increase over the coming period.

Two economic development scenarios

At the seminar, two scenarios of the Vietnam's economic growth in 2014 were given in detail. One focuses on feasibility and other aims at high growth.

Under the scenario of feasibility, once the economy has difficulties solved and macro policies gradually put into practice, the economic bottlenecks are resolved in a positive direction; the growth rate of GDP in 2014 may reach 5.67 percent with CPI around 7 percent; the GDP growth in 2015 may reach 6.03 percent and CPI rise of about 7.2 percent.

Under the high growth scenario, economic growth in 2014 will reach nearly 6.2 percent, and inflation will be controlled at around 7 percent. The GDP growth in 2015 will reach 6.5 percent and the CPI is about 7.5 percent.

According to Mai Thi Thu, Director of the National Centre for Socio-Economic Information and Forecast of the Ministry of Planning and Investment, the high growth scenario could occur if the Vietnam’s economy continues to develop and benefit from the world economic recovery, accordingly taking more advantages of promoting investment and trade.

She also said that a number of policies issued in 2013 will make more positive impact on the economy in 2014, because many businesses have overcome the most difficult period. If the Government implements policies firmly and consistently and actively supports businesses, the outcomes of the policies will bring more benefits to the businesses and drive the economy to grow faster.-VNA