Fri. May 27th, 2022

Vietnam’s economy is expected to grow at a moderate rate of around 5.3
percent this year and 5.4 percent in 2014, according to a report
released by the World Bank (WB) in Vietnam on July 12.

The report forecasts that inflation will increase to about 8.2 percent by the end of the year.

In the report, WB experts said that Vietnam’s macroeconomic
conditions continue to improve as its economy enters the third year of
relative stability.

Inflation was 6.7 percent
in June 2013. Central Bank reserves have more than doubled in the past
two years. Meanwhile, Vietnam’s credit default swap was about 250 basic
points in June 2013 compared to about 350 one year ago.

According to the report, in the first half of 2013, the country’s
total export value saw a year-on-year increase of 16 percent. The
foreign-invested sector accounts for 66 percent of total exports, up 25
percent from the first six months of last year.

In the same period, exports of mobile phones and spare parts became the
country’s largest export item with a total value of 9.9 billion USD,
surpassing traditional exports like crude oil, garments and footwear.

The report also cites the results of the ASEAN
Business Outlook Survey by the Singapore Business Federation and the
American Chamber of Commerce (Amcham). It says that Vietnam remains the
most popular location for expansion within the ASEAN region.

However, the report also points out challenges Vietnam’s
macro-economy has been facing, including slow structural reform, which
it says, can reduce investors’ trust and badly affect the country’s
growth prospects.

Restoration of macroeconomic
stability and the tight credit policy of the State Bank of Vietnam have
prevented the vulnerabilities from growing bigger, the report says.

According to the report, the establishment of the Vietnam Asset
Management Company has been the most visible step taken by the
Government to deal with bad debts.-VNA

By vivian