Macro-economic Stabilisation: Top Goal

At the "Vietnam Economic Forum: Economic Forecast for 2012 - 2015 Period” held by the Central Institute for Economic Management (CIEM) under the Ministry of Planning and Investment in collaboration with the Economics and Forecast Magazine, speakers hotly discussed about opportunities for the Vietnam’s economy.

 

Most senior economic specialists shared a gloomy outlook of Vietnamese economy in particular and global economies in general. Dr Vo Dai Luoc from the Institute of World Economics and Politics said world economies were shaken by negative developments in major economies and emerging highlights got duller. In 2012, situations are forecast not to improve but tend to worsen. Emerging economies like China, Brazil and Russia projected lower growth than in 2011.

 

The globalisation is deepened in all areas but it lacks sustainability, consistency and right-way regulation. This is what experts identified as root causes of crisis - the outcome of global economic imbalances that cannot be resolved in a short time.

 

Luoc said the global economic crisis imperceptibly provide the opportunity for the Vietnamese economy to develop. But, according to Dr Tran Dinh Thien, Head of the Vietnam Institute of Economics (VIE), given the limited opening degree, the Vietnamese economy will surely be affected by strong negative impacts of global downturn. For that reason, the Vietnamese economy is in a very urgent and critical situation in the short term. This requires a long-term outlook on development.

 

Mr Thien noted that in previous years Vietnam’s fundamental economic indicators like growth, inflation, currency value and debt are not as clear as other economies. It is like a paradox that growth rates slowed down since 2007. Given three 5-year socioeconomic development plans (1996-2000, 2001-2005 and 2006-2010), investment capital increased but the growth in later phases were lower than earlier phases

 

Given such a context, to have good opportunities for the Vietnamese economy to develop, according to Mr Vo Tri Thanh, Deputy Director of CIEM, the primary objective in the 2012 - 2015 period is to boost macroeconomic stability in couple with economic reform and restructuring. Regional development needs to be more balanced and rationalised. The contribution of industry and services to GDP needs to be increased while agricultural production needs to be modernised, with attention paid to productivity and quality. Investment efficiency, labour productivity and economic competitiveness need to be boosted. Then, Vietnam will move to create three breakthroughs: institutional innovation, infrastructure and human resource quality.

 

Prof Nguyen Mai, President of the Vietnam Association of Foreign Invested Enterprises (VAFIE), said: Economic growth objective and inflation control targets in 2012 will largely depend on macroeconomic policy management. He put forth two scenarios for the Vietnamese economy in 2012. The first scenario features the ability to overcome high inflation, stabilise macro economy, and improve the efficiency of investment and business. Then, GDP growth is forecast to reach 6.5 percent or even high, inflation growth will be capped at a single-digit rate, and positive socioeconomic development will lay the groundwork for higher, more effective and more sustainable growth in subsequent years. The second scenario covers slow reform poses Vietnam to a host of risks while global political and economic situations evolved negatively. Economic growth will hardly reach 5 - 5.5 percent.

 

Vietnam is facing numerous challenges and the Government is expected to adopt flexible regulations to drive the economy to a better future.