Vietnam’s economic growth unsustainable

Delegates at a conference on Vietnam’s economy prospect said the country’s economic growth unsustainable in the third quarter this year in Ho Chi Minh City yesterday.

A seaport in HCMC (Illustrative photo: SGGP)

Dr. Nguyen Dinh Cung, head of the Central Institute for Economic Management, said that economic growth recovered with 6.8 percent in the third quarter this year.

However, overall view into the development structure shows that industry has developed to its peak and been reducing, agriculture in down trend and only mining on the rise, he stated.

Trade deficit has returned and budget expenditure has been faster than collection resulting in increasing budget shortage for recent years.

The above factors prove that the country’s economy has grown unsustainably, he affirmed.

The Government should make strong reforms in economic institution and investment environment, and give small and medium enterprises more financial assistances to help them improve production and take advantage of incentives from free trade agreements, he proposed.

Agreeing with Mr. Cung, Ms. Dang Thi Minh Phuong, chairwoman of CEO Club in the city, said that Vietnam’s economy will face severe competition next year when the country further open its market with more effective free trade agreements.

However, she expressed concern over weak inner forces of Vietnamese businesses making them vulnerable to integration.

Deputy Governor of the State Bank of Vietnam Nguyen Thi Hong said that the issue partly started from capital shortage.

Foreign companies have diversified sources of capital and bank fund just plays short term role while in Vietnam, most funds to assist businesses have been provided by the banking system which has failed to meet their long term loan demand.

By Ai Van – Translated by Hai Mien

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