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Experts forecast 5.68% growth

Update: December, 10/2012 - 09:46


Workers make clothes for export at the An Phuoc Sewing Shoes Co Ltd in HCM City. The nation's growth rate is likely to reach 5.68 per cent next year, experts predict. — VNA/VNS Photo Ha Thai
HA NOI (VNS)— The nation's growth rate is likely to reach 5.68 per cent in 2013, under the likeliest scenario discussed by experts at a conference held here last week to review economic growth in 2012 and prospects for development in 2013.

Based on an analysis of the economy's strengths and weaknesses this year, as well as predictions for global growth in the coming year made by a number of international organisat-ions, the research group from the Ministry of Planning and Investment's National Centre for Socio-Economic Information and Forecast presented to the conference three possible scenarios for Viet Nam's economic growth next year.

In the worst-case scenario, said the head of the centre's forecasting board, Pho Thi Kim Chi, growth would fall below targets due to slowed exports to the economies of the EU, US and Japan, resulting in growth next year of only about 5 per cent, comparable to this year's pace.

While the US and European economies were on track to recover, which would be important for Vietnamese exports, both markets tended to erect more aggressive trade barriers, said the centre's deputy director, Dr Do Van Thanh.

Japan's growth was also forecast to slow next year, which would have a negative influence on Vietnamese exports, since Japan was not only one of the nation's three top trading partners but also the country's leading source of foreign investment, Thanh said.

In the second and most likely scenario, the eurozone would find its way out of its debt crisis, political and island sovereignty disputes would ease, the US economy enter a modest recover, and Japanese growth would match 2012 levels. Under this middle scenario, Viet Nam would see growth next year of 5.68 per cent.

Inflows of foreign direct investment (FDI) and official development assistance (ODA) were likely to be higher next year, giving further impetus to domestic growth, Thanh said. Slowing growth in India and China also offered a competitive opening for Viet Nam, which could still offer labour and input costs to foreign investors two-to-two-and-half times less than these regional giants, he noted.

Under the best-case scenario, the global economy would grew at 3.6 per cent next year and the Vietnamese Government would undertake effective measures to stimulate domestic production and lower bad-debt levels. Under this scenario, growth could reach 6.34 per cent, the research team said.

To achieve either of the latter two scenarios, the Government would need to maintain economic stability, keep inflation at 2012 levels, implement tight yet flexible monetary policies, and find ways to improve the efficiency of investment in the economy, especially among State-owned enterprises, they said.

The Government should encourage production by issuing tax and fee exemptions and reductions, and special attention should be paid to increase the spending power of low-and middle-income earners, Chi said.

Centre researcher Le Tat Phuong also emphas-ised that it would be necessary to stimulate the frozen real estate market in order to resolve the problem of mounting real estate loan defaults and high levels of bad debts in the nation's banking system.

Bank restructuring also needed to be pursued thoroughly and aggressively, not only to resolve the problem of bad debts but to create healthier credit markets, Phuong said.

The experts at the conference also stressed the important role to be played by corporate restructuring, especially at State-owned enterprises, to reduce waste in the use of State capital and create a healthier competitive environment among enterprises. — VNS

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