In a statement released yesterday by the International Monetary Fund (IMF)’s Board of Directors in Viet Nam, they praised Viet Nam’s impressive record of sustained growth and the contributions made to rapid poverty reduction measures.
The country’s overall economic prospects were evaluated as favorable by the IMF.
Acceptance into the WTO should create a myriad of new opportunities for growth of non-oil exports and direct foreign investment, while high oil prices should continue to support the public finances.
The IMF also welcomed the recent deceleration of credit growth and Viet Nam’s plan to make its currency, the Viet Nam dong, fully convertible by 2010.
However, the IMF’s Board of Directors warned that a rising public debt burden could eventually crowd out poverty-reducing measures in the event of a slowdown of world growth or a decline in oil prices.
The IMF board members urged the adoption of a more prudent fiscal policy. A policy with additional screening of new investment projects, a greater degree of scrutiny on reporting and monitoring of the government’s extra budgetary operations, as well as more accountability for all publicly-funded projects would go a long way to strengthen donor and investor confidence.