|Cái Răng Floating Market in the Mekong Delta city of Cần Thơ. — VNA/VNS Photo
HÀ NỘI — Việt
The report, titled “Navigating Uncertainty”, is the October 2018 edition of the World Bank East and Pacific Economies Update. Released on Thursday, it says that Việt Nam’s medium-term outlook has improved further.
The country’s real gross domestic product (GDP) is now projected to expand by 6.8 per cent in 2018, up from 6.5 per cent in the WB’s previous projection in April. The economic growth is also projected to moderate to 6.6 per cent in 2019 and 6.5 per cent in 2020 due to the forecasted cyclical moderation of global demand.
Despite reduced slack in the economy, the WB expects inflation to remain around the 4 per cent government target, predicated on some tightening of the monetary stance amid counter price pressures emanating from domestic input price pressure and rising global commodity prices.
Sebastian Eckard, WB lead economist in Việt
Moreover, the GDP growth was broad-based, led by strong manufacturing growth of 13 per cent, bolstered by strong external demand.
Agriculture output growth also accelerated to 3.9 per cent largely due to strong performance in the export-oriented fishery sub-sector.
Expansion of the service sector remained robust at 6.9 per cent underpinned by strong underlying retail sector growth supported by buoyant private consumption and record tourist arrivals.
“Robust economic performance is underpinned by a Government commitment to macroeconomic stability and private sector-led growth. Economic policies continue to focus on market-oriented reforms to reduce the economic role of the state, boost business conditions and open the economy for more private investment,” the report says.
The World Bank also applauds that Việt Nam’s dynamic economy continues to translate into broad-based welfare gains and poverty reduction.
For example, more than 900,000 wage jobs were created last year and real wages further increased by 4.3 per cent, driven by strong labour demand in the manufacturing, construction and service sectors.
Estimates of poverty based on the international lower middle-income poverty line (US$3.2 purchasing power parity in 2011) are projected to have declined from around 8.2 per cent in 2016 to 6.4 per cent in 2018.
Despite improved short-term prospects, Việt
Among recommendations for Việt
Monetary policy should tighten liquidity in the banking sector to align interbank rates with policy interest rates and to bring credit growth in line with fundamentals.
It’s also necessary to continue focusing on comprehensive and deep structural reforms including regulatory reforms to remove barriers to and reduce the cost of private sector activity, human capital and high-quality infrastructure investment, and further reforms to enhance the productivity of State-owned-enterprise sector.
According to the WB report, growth in East Asia and the Pacific is expected to be 6.3 per cent in 2018 – a positive outlook for the region despite a less favourable external environment thanks to trade tensions, higher