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CIEM gives three scenarios for Vietnam’s economy in 2009
The Central Institute of Economic Management (CIEM) this morning released its annual economic report, giving three scenarios for the performance of Vietnam’s economy in 2009.
CIEM says that because of the global financial crisis and the domestic economic downturns, the main economic indices and GDP growth rates in 2009 in all the three scenarios are all lower than in 2008 and previous years.
In the basic scenario, Vietnam’s economic growth rate decreases to 4.69% in 2009 from 6.18% in 2008. The inflation rate is as high as 9.4%, while export turnover decreases by 12.2% and the trade deficit is 8.7% of GDP.
In the scenario, the growth rates of the three main sectors (agriculture, industry and construction-service) are 2.67%, 4.69% and 5.7%, respectively.
Also in this scenario, the budget deficit of 2009 is relatively high at 9.7% of GDP.
In the optimistic scenario, the world’s economic performance is not too pessimistic and Vietnam’s investment environment remains attractive to foreign investors.
The suppositions for the optimistic scenario are that trade partners have GDP to grow by 1%, the crude oil price stays at $60/barrel, while industrial material import prices and farm produce export prices decrease by 20% and 15%, respectively. Meanwhile, the foreign direct investment (FDI) decreases by 15% compared to 2008.
In the pessimistic scenario, people see more disadvantageous conditions: trade partners have the GDP growth rate at 0%, the crude oil price stays at $40/barrel, and FDI disbursement decreases more sharply by 30% over 2008. The VND loses 3 percentage points in value, while the total money supply (M2) increases by 15% per annum in 2009.
CIEM’s Director, Dr Dinh Van An, said that the economic goals set by the National Assembly for 2009 prove to be unfeasible if considering the world’s economic performance.
An, on one hand, said that the economic indices in all three scenarios will decrease, on the other hand, he is optimistic about Vietnam’s recovery. “It is very likely that the economy will lean towards the optimistic scenario,” An said.
He went on to say that it is absolutely possible that Vietnam’s economy will recover sooner than big countries’, as the government has been implementing a series of initially-successful measures to curb economic downturns.
According to CIEM, though the economic crisis has impacted all economies in the world, Southeast Asia and Vietnam are not in the ‘eye’ of the crisis.
International institutions have also predicted lower economic indices for Vietnam in 2009 than in 2008. IMF and WB predicted GDP growth rates at 3.3% and 5.5%, respectively, while ADB said GDP growth rate may be 4.5%.
VietNamNet, TBKTVN
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