Economists agree on better outlook

Vietnam’s economy could fare better this year and next if the Government continues its efforts to stabilize the macro economy and deal with structural weaknesses. At a seminar on issues and solutions for the economy in 2014 held in HCMC recently, Tran Du Lich, deputy head of HCMC’s National Assembly deputies delegation, said, “There are factors making us believe that the economy could regain high growth, market confidence could improve and businesses could grow in a more sustainable way.” High inflation that has plagued the economy over the past several years is now under control, he said, adding that the risk of collapse of the banking system is almost over. Foreign investors’ confidence remains stable as proven by a steady improvement in foreign direct investment.

Sandeep Mahajan, chief economist of the World Bank in Vietnam, said Vietnam’s medium-term economic prospects are good despite risks. The country would be able to achieve GDP growth of 5.5% next year provided the Government continues its prudent macroeconomic policy, tapers its fiscal stimulus and focuses more on economic reforms.

Vo Tri Thanh, deputy head of the Vietnam Institute for Economic Management, said a spike in budget overspending and additional bond issues to raise funds for investment would help boost the economy and export growth. However, he also noted the associated risks such as higher inflation and trade deficit. Thanh pins high hopes on free trade agreements (FTAs) that Vietnam is expected to sign with partners such as the Trans-Pacific Partnership, the ASEAN+6 (Australia, New Zealand, India, China, Japan and South Korea) Free Trade Area and the Vietnam-EU FTA.