Vietnam will face severe economic difficulties next year due to the global crisis but still have opportunities to develop if it can usher in reform and adopt smart long-term polices, economists have said.
|Transactions conducted at an Orient Commercial Bank branch in HCMC. Interest rates are sharply down (Photo: SGGP)|
Speaking at a seminar December 22nd organized by the Vietnam Economic Times to discuss economic prospects in 2009, Dr. Vu Thanh Tu Anh, director of research at the Fulbright Economics Teaching Program, said the global economic situation would be worse than has been predicted, and Vietnam would surely be affected.
He said signs of stagnation and even recession have appeared in recent months, as seen in the fall in exports and tourism and rise in unemployment rate.
Truong Dinh Tuyen, former trade minister and now a member of the National Advisory Council for Finance and Monetary Policies, said exports would struggle to hit the target of 13 percent growth next year.
Besides, producers would face fierce competition from Chinese and other goods in their own backyard, he said.
Financial expert Bui Kien Thanh said exports and foreign direct investment would both fall in 2009, as would remittances.
With the central bank cutting its interest rate to 8.5 percent, commercial banks’ lending rate ceiling has fallen to 12.75 percent, he said, adding this is good news for businesses but could prove to be a headache for the banks because they mobilized deposits when interest rates were sky-high a few months ago.
Dr. Tran Dinh Thien, head of the Vietnam Institute of Economics, said short-term growth targets should not be dramatized, but next year should be considered a period for the country to boost reform and establish a mechanism for its long-term growth process.
The falling interest rate would be beneficial for investment, business, and production, he said.
The Government plans to spend US$1 billion through an economic stimulus package next year, and companies need to grasp this opportunity to boost their business, he said.
To consolidate their position, they should focus on cornering the local market, he added.
Mr. Thien said stabilizing the economy and creating jobs would be priorities. The exchange rate policy has to reasonable to boost exports and check imports to prevent cheap products flooding the country.
Mr. Anh warned the Government’s policies should be based on market trends and not be arbitrary.