WB Expects Vietnam’s Economy to Grow by 6.2 Pct in 2015

The Vietnamese economy is projected to expand by 6.2 percent in 2015 before picking up slightly to 6.3 percent the following year, the World Bank says in its latest report on developing countries in East Asia.

This figures are lower than the government target and recent forecasts by the Asia Development Bank, which said in September that Vietnam’s economy would grow by 6.5 percent this year and 6.6 percent in 2016.

The World Bank has also predicted that consumer price inflation, despite expansionary monetary measures, will drop to 1.5 percent in 2015 thanks to lower energy and food prices, and accelerate to 3 percent in 2016.

The bank says the medium-term outlook for Vietnam is positive but subject to risks, both external and domestic.

With significant trade linkages, Vietnam is vulnerable to global uncertainties and weak prices of agricultural products, the World Bank notes, adding that domestically Vietnam is still facing the challenges of structural reforms in the state sector.

According to the World Bank’s economist Sandeep Mahajan, in addition to disinvestment, State-owned enterprise restructuring should focus on quality by implementing complementary reforms such as information disclosure, and stricter corporate governance and selection of the management board.

He also recommended the government create a level playing field to encourage the development of the private sector.

Also in the report, the World Bank predicts that the rate of Vietnamese living in extreme poverty, or less than US$1.90 a day, will fall from 2.8 percent in 2012 to 1 percent in 2017, while the percentage of those living below US$3.10 a day will fall to 6.7 percent during the same period.

NDO