WB Country Director for Vietnam Ousmane Dione speaks at the release of the report in Hanoi on December 11 (Photo: VNA) Hanoi (VNA) – The World Bank (WB) expectsVietnam’s economic growth this year at nearly 6.8 percent, compared to the 6.3percent projected for East Asia and the Pacific, in a report released onDecember 11.
In the report “Taking Stock: An Update onVietnam’s Recent Economic Economic Developments”, the WB said the country’soutlook remains robust despite growing external headwinds, which is supportedby strong domestic demand and a dynamic export-oriented manufacturing sector.
The growth in the medium term is forecast todecelerate incrementally to 6.6 percent and 6.5 percent in 2019 and 2020,respectively. Inflation is expected to remain muted, at about the State Bank ofVietnam’s target of 4 percent, given anticipated monetary policy tighteningover the medium term.
Meanwhile, risks to the outlook have intensifiedand are tilted to the downside. Domestically, a slowdown in the restructuringof the state-owned enterprise and banking sectors could undermine growthprospects and create public sector liabilities. Vietnam also remainssusceptible to external volatility, given its high trade openness and limitedfiscal and monetary policy buffers.
Escalating global trade tensions could affectVietnam’s export-oriented prospects, and a falloff in external demand couldlead to weaker external positions and lower GDP growth. Tightening globalliquidity could reduce capital inflows and put downward pressure on theVietnamese dong and asset prices, according to the report.
The report’s special focus is on thestreamlining and improvement of the transparency of non-tariff measures (NTMs)to facilitate trade. While tariffs have been decreasing along with the processof international economic integration, the number of NTMs has increasedrapidly.
Vietnam’s average preferential tariffs havefallen from 13.11 percent in 2003 to 6.33 percent in 2015. In contrast, thenumber of NTMs has increased by over 20 times in the period.
NTMs, if poorly designed and implemented, canrestrict trade, distort prices, and erode national competitiveness, the reportsays, adding that the NTM system in Vietnam remains complicated, opaque, andcostly. –VNA
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