WB RAISES GROWTH FORECAST FOR VN

The World Bank has upgraded its economic forecast for the Vietnamese economy to 6.7% in 2017, higher than its previous rate of 6.3%. The news was announced by the international lender on December 11 in Ha Noi while publishing an annual review report on Vietnamese socio-economic performance.

The WB projected that on the basis of achieved progress, Viet Nam would be able to raise productivity rate, necessary skills and infrastructure; cement and deepen business environment reform.

In the medium term, growth rate would be stable at about 6.5% and inflation would be kept at low level.

Mr. Ousmane Dione, the Country Director for the World Bank in Viet Nam was quoted as saying that the growth trend in developed countries have been promoted and the global trade showed signs of recovery. Thanks to higher incomes and lower poverty rate, the Vietnamese economy would enjoy a thriving year with high economic growth rate and stable macro-economy.

Meanwhile, Mr. Sebastian Eckardt, the WB’s Lead Economist for Viet Nam analyzed that the higher domestic demands, good performance of service, manufacturing and processing sectors generated driving force for GDP growth at about 6.7% in 2017. Low inflation rates and higher practical wages would help maintain domestic purchasing power at high levels.

The thriving global economy would support domestic the agricultural and manufacturing sector especially in the export-oriented economy in Viet Nam. The number of employment would be on the rise with 1.6 million jobs in the manufacturing sector over the last three years, and 700,000 additional others in construction, retail sales, services, and higher labor productivity.

Despite some progresses in NPLs settlement, the economy still copes with risks such as unsecured capital safety of commercial banks especially albeit high credit growth period.

Mr. Sebastian Eckardt said that during tightened fiscal management, lower budget overspending, Viet Nam still lacks supportive infrastructure for future growth.

WB experts also recommended Viet Nam tighten budget in the next couples of year as public debts are close to 65% of GDP.

Source: VIR