In its bi-annual assessment of Vietnam’s economy launched on December 2, Work Bank announced that Vietnam has done well in ensuring macroeconomic stability over the past year, which has been underpinned by moderating inflation and strengthening external accounts.
World Bank experts said projects GDP growth in Vietnam to rise modestly to 5.3 percent in 2013; continue to rise to 5.4 percent by 2014 and 5.5 percent by 2015, with macroeconomic stability largely restored.
The Taking Stock, a bi-annual assessment of Vietnam’s economy, identifies several critical risks to macro-economic stability, including low foreign exchange reserves; fragile private sector demand, possibility of departure from fiscal and monetary discipline; slow progress on structural reforms; and loss of confidence in a fragile banking sector.
The Taking Stock further notes that progress on SOE restructuring has been slower than expected, and more work is needed to ensure that the targets chosen for SOE reforms are feasible; proper account is taken of the complexity of the issues and specificity of individual SOEs; and, oversight and coordination mechanisms are strengthened.
Non-performing loans (and the uncertainty around their true measure) in the banking sector remain a major concern, and due attention is needed to issues of bankruptcy, insolvency, and creditor rights which will facilitate corporate debt restructuring.