HA NOI — The World in 2050, a research publication issued by the Hongkong and Shanghai Banking Corp (HSBC) earlier this month, ranks Viet Nam among 26 fast-growth economies in the world.
|View of HCM City - the country's largest economic hub. HSBC forecast the country's gross domestic product (GDP) would grow by 5.7 per cent this year. — VNA/VNS Photo Trong Duc
These economies are still at a very low level of development but have made great progress in improving fundamentals, it says.
As they open themselves to the technologies available elsewhere, they should enjoy many years of "copy and paste" growth ahead, the study forecasts.
This group includes China, India, the Philippines, Malaysia, Bangladesh, Uzbekistan, Kazakhstan, Turkmenistan, Egypt, Jordan, Peru, and Ecuador.
The study divides the Top 100 economies into three categories: fast growth – with an expected annual growth rate of more than 5 per cent; growth (between 3 and 5 per cent); and stable (less than 3 per cent).
Viet Nam is expected be in 41st place in a 100-country list in 2050, up from the 52nd the first study issued last January predicted.
The latest publication expects Viet Nam to have an income per capita in 2050 of US$4,350, up from $674 in 2010, both at 2000 prices.
Another report by HSBC Global Research, titled Macro Asian Economics, expects Viet Nam's GDP growth to be 5.7 per cent this year against the Government's target of 6 to 6.5 per cent. Last year it was 5.9 per cent.
While exports were expected to expand by another 24 per cent this year, high import demand would continue to keep the trade deficit elevated. Fuel and raw materials needed for production constitute 61 per cent of the nation's total imports, while machinery and equipment account for another 29 per cent.
The country's trade deficit has not been a major source of concern since it has been offset by steady foreign direct investment inflows totalling $11.6 billion last year, the report said.
Viet Nam's greatest economic concern continues to be its struggle to maintain price stability. Inflation rates during 2011 ranged from 12.2 per cent in January to 23 per cent in August. The report predicted inflation would reach single-digit levels this year, although hikes in electricity rates and regional food supply shocks had the potential to stoke inflationary pressures.
Overall consumer spending, although still strong, decelerated in 2011 due to persistently high inflation, limited access to credit, and declining property values.
Investment was also expected to slow down this year as a result of the credit squeeze. Credit growth has slowed from 27.7 per cent of GDP in 2010 to just 13 per cent last year, the report noted. It predicted that lower inflation would motivate the State Bank of Viet Nam to reduce interest rates in 2012, possibly as early as the first quarter.
To increase investment efficiency, the central bank has already proposed a road map to restructure the banking system to allocate capital more effectively.
The Vietnamese Government has already taken much-needed steps to tighten fiscal and monetary policy, the report said. — VNS