HANOI – Economic experts have predicted Vietnam’s economic outlook this year will suffer from negative external factors and be more vulnerable in terms of macro and financial issues.
At a forum on economic forecasts for the 2012-2015 period organized by the Ministry of Planning and Investment and Kinh te va Du bao magazine in Hanoi on Wednesday, Vo Tri Thanh, vice president of the Central Institute for Economic Management (CIEM), said macroeconomic risks remained in Vietnam.
Gross domestic product (GDP) growth is expected to range from 4.7% to 6.5% this year, Thanh added.
Inflation might be contained to a single digit but economic growth would slow as a trade-off. So the challenge is how to stabilize the macro-economy and tame inflation without affecting production and business activities given public investment cuts and shrinking export markets.
“The critical factor is the flexibility in implementing monetary, fiscal and exchange rate policies,” said Thanh.
Professor Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises, shared Thanh’s view, saying economic experts have described Vietnam as the most vulnerable Asian country to the global economic volatility.
They attributed this vulnerability to high inflation, weak enterprises, big State budget deficit and potential banking system risks.
Vietnam’s economic scenarios this year are dependent on the world’s economic situation and the country’s adaptation to market upheavals, said Mai.
“If failing to change swiftly and synchronously, our country might face more risks as the global economy becomes more volatile. So growth of 5-5.5% looks unachievable, and the risk of falling behind ASEAN and Asian countries is more obvious.”
As for inflation and monetary policy, Vice Chairman Le Xuan Nghia of the National Financial Supervisory Commission said this year’s inflation might drop. However, there is no ground for interest rates to fall as banks are facing liquidity problems and public confidence remains dampened.
Bad debts remain huge and cannot be completely settled overnight. Hence, the amount of capital that will find its way to the banking system will be insignificant, pushing up lending costs.
The important macro-economic target to be fulfilled right in the first quarter of this year is to stabilize liquidity in the banking system.
