Economy moves towards growth, auditors predict

Economic activity in Viet Nam remains subdued but is set to pick up this year and in 2014, auditing firm Ernst & Young predicts in its forecast about rapid-growth markets.

This year, the country's Gross Domestic Product (GDP) is expected to be 5.5 per cent, and the consumption price index (CPI) 7.8 per cent.

In 2015, the country's GDP is estimated to climb to 7.1 per cent and the CPI to fall to a growth of 4.8 per cent.

"The near 7-per cent growth trend can be regained by 2014, as export markets recover, if banks become more stable and if rule changes are enacted for planned foreign direct investment," Ernst & Young said in its report.

"Import substitution will continue to contain the trade deficit, despite consumption picking up as inflation subsides. But competition from other low-cost locations is a downside growth risk," it added.

In its forecast, Ernst & Young said that China continued to move up the value chain, creating many development chances for other Asian countries, including Viet Nam.

China plans to generate 8 per cent of GDP by 2015 in seven strategic areas: energy conservation and environmental protection, new-generation information technology, biotechnology, high-end equipment manufacturing, new materials, new energy and clean-energy vehicles.

Thanks to such changes, other markets like Viet Nam and regional countries as well as countries in Africa where the salary is low will strongly emerge in some industries such as the garments and textiles.

"We expect Indonesia, Thailand and Viet Nam to increase their combined share of the world textile market from around 5 per cent currently to more than 10 per cent over the next 25 years," it said.

In addition to garments, the telecom industry in these markets is also expected to develop strongtly.

Viet Nam is one of 25 rapid-growth markets cited in the report that have shown improvement thanks to an increase in trade and demand for commodities.

Ernst & Young said that these markets had started to regain momentum.

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