WB lowers Vietnam growth forecast, points out economic resilience

Vietnam is forecast to post economic growth of 6.5% in both 2008 and 2009, lower than earlier predictions, the World Bank said in its semi-annual report released Wednesday.

In April, the WB forecast 8% growth for the Southeast Asian country this year and 8.5% next year.

But the international lender’s latest report is more optimistic than the International Monetary Fund’s recent forecast of 5% for next year.

For this year, the WB report predicted 6.7% growth for Cambodia, 6.0% for Indonesia, 7.0% for Laos, 5.5% for Malaysia, 4.0% for the Philippines, and 4.6% for Thailand.

The document wrote that Vietnam’s performance in 2008 demonstrated the resilience of its economy. “After three years of real GDP growth above 8 percent, the pace of economic expansion slowed in the first 10 months of 2008, largely reflecting the impact of the authorities’ stabilization package.”

The WB said inflows of foreign direct investment have remained robust so far. FDI approvals for the first 10 months of 2008 reached a record level of US$59.3 billion, equivalent to about two-thirds of GDP. Disbursements in 2008 are forecast to amount to about $11 billion, up from $8.1 billion in 2007.

The current account deficit has begun to decline after surging sharply in the first half of 2008, reflecting slowing import growth because of the authorities’ austerity measures and robust export growth, the report wrote. For the year as a whole, however, the current account deficit is still likely to widen from 10 percent in 2007 to 13 percent of GDP in 2008 before declining in 2009.

Workers prepare fish fillets at a factory in the south. Seafood is a major export earner of Vietnam (Photo: SGGP)

The report said the Vietnamese government is currently preparing a stimulus package to face the global downturn.

The package is organized around five groups of measures: promoting production and exports, supporting consumption and investment, further loosening the financial and monetary stance, reducing poverty and providing social welfare, and strengthen public sector management at all levels.

“The fiscal implications of this package are still unclear, but an increase in expenditures can be anticipated. Current discussions set the additional level of expenditures at around one billion dollars, or roughly one percent of 2008 GDP,” the WB report wrote.

By Tuong Thuy

Other news

Most view

185 leading domestic & in't enterprises join in VN ETE 2018

185 leading domestic & in't enterprises join in VN ETE 2018

The Vietnam Exhibition of Electrical Technology and Equipment (Vietnam ETE 2018) and the Exhibition of Products, Technologies for Energy Saving and Green Power (ENERTEC EXPO 2018) yesterday kicked off in HCMC’s Saigon Exhibition Convention Center in district 7.

Banking-finance

VNPT & SeABank cooperate to enhance connections

The Vietnam Posts and Telecommunications Group (VNPT) and SeABank just co-signed cooperation agreement, aiming to develop the two sides’ economic, business and investment potential.


Self - introduction

VNPT targets to be leading digital service provider in Vietnam

The grand opening ceremony of the VNPT-Information Technology Company (VNPT-IT), a new member of the Vietnam Posts and Telecommunications Group (VNPT), was held yesterday in Hanoi. With thousands of IT engineers and the focus on developing state-of-the-art technological products related to Artificial Intelligence (AI), Bigdata, and Blockchain, the new company is considered the main force to help VNPT fulfill the goal of becoming a leading digital service provider in Vietnam and an important Digital Hub of the neighborhood as well as the world.

Stock market

SAS profits VND 118bln

The Southern Airports Service Joint Stock Company (Sasco) which is listed under code SAS on the Unlisted Public Company Market (UPCoM), announced its second quarter’s financial report with net revenue at VND 634.5billion, an increase of 14 percent compared to last year.