|
7% GDP growth rate unreachable: experts
Economic indicators have improved in the last two months, but abysmal conditions in the first half of the year will likely prevent Vietnam from reaching its economic goals.
7% GDP growth rate goal unfeasible
The Central Institute for Economic Management (CIEM) earlier this year gave three scenarios for Vietnam’s economy in 2008: 7.2% GDP growth rate in normal conditions, 7.6% GDP growth rate in the higher scenario and 6.7% in the lower.
The happenings in the first nine months of the year have made experts believe that the lowest scenario is the most likely.
According to the General Statistics Office (GSO), the economic growth rate in the first three quarters of the year was 6.52%, well below the targeted level of 7%. In order to reach the targeted economic growth rate of 7% by the end of the year, Vietnam needs to make breakthroughs in the last months of the year.
This will be a big challenge for Vietnam as the last months of the year are considered the most difficult period for enterprises because this is when monetary-tightening policies are expected to show their effects.
In the latest version of his research about Vietnam’s economy released at the Economic Forum 2008 held in Hanoi on October 2, Dr Vo Tri Thanh, Head of the Department for International Economic Studies under the Central Institute of Economic Management (CIEM), said that the GDP economic growth rate is expected to be as high as 6.7%, while the inflation rate 24-24.5%.
Thanh has forecast that industries and branches which had high growth rates last year will see low growth rates this year, or even minus growth rates. Industrial production, for example, will increase by 6.6-7.2% only, the service sector 7.1%, while construction will see the minus growth rate of - 0.8-1%, according to Thanh.
Regarding the GDP growth rate in 2009, Thanh said that next year will not see much improvement, with the GDP growth rate expected to be 6.5-7% and inflation rate 12-16%.
As of 2010, Vietnam’s economy will be on track with the world’s economy with a one-digit inflation rate and growth rate possibly over 7.5%.
Which policies to be applied?
According to Thanh, the government needs to be cautious when choosing policies to follow. He said it is now really a ‘sensitive’ moment and that policymakers are under heavy pressure. Policies need to be designed in a way that allows different goals to be reached at the same time: curbing inflation, stabilising the national economy, while still ensuring a high economic growth rate and addressing social problems.
Nguyen Hong Son, Deputy Headmaster of the Economics University under the Hanoi National University, also said that it is now really a challenging period for the State Bank of Vietnam with its monetary policy management.
Son said that the State Bank of Vietnam has been urged to loosen the monetary policy in order to provide more capital for the private economic sector, which is now thirsty for capital. However, he said that the central bank needs to consider this thoroughly before making a decision as the risk of high inflation still exists.
VNN
|
