Vietnam's Economy to Grow 8 per cent in 2005: UN Agencies
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the United Nations Development Program (UNDP) on April 25 forecasted that Vietnam would achieve a gross domestic production (GDP) growth rate of 7.5-8 per cent this year.
In its report dated April 25, ESCAP predicted that Vietnam's GDP growth rate would reach 8 per cent in 2005, ranking 1st in Southeast Asia and 3rd in the Asia-Pacific region.
Meanwhile, the UNDP said Vietnam would rank the 5th in the Asia-Pacific region in term of economic growth this year with a growth rate of 7.5-8 per cent (after Azerbaijan 14 per cent, Turkmenistan 11 per cent, China 8.5 per cent and Kazakhstan 8.5 per cent.
The forecasts of ESCAP and UNDP are higher than previous predictions by the International Monetary Fund and the Economist Intelligence Unit of 7 per cent for this year.
Regarding the stable development of the country’s economy, at a press briefing held in Hanoi on April 25, Dr. Vo Tri Thanh, expert from the Ministry of Planning and Investment, said it was not necessary to obtain high growth rates by any means possible.
"Instead, attention should be focused on macro-economic stability and the quality of the development."
As Vietnam’s economy only expanded by 7.2 per cent in the first three months of 2005, the country is under pressure to push economic growth to 9 per cent over the last three-quarters to reach its target growth rate of 8.5 per cent.
This is an extremely tough mission, he remarked, adding that a “more modest” target of 8 per cent is good for Vietnam’s economic stability.
Meanwhile, Jonathan Pincus, UNDP expert in Vietnam, said Vietnam had made a lot of progress in many fields, especially in its national accounting system which has been massively improved as compared to 10 years ago, and its policies had become more practical.
However, he said, the country should pay attention to the stability of development, combined with job creation and improved education in order to increase the quality of human resources.
In 2004, according to ESCAP, Vietnam recorded a 7.7 per cent GDP growth rate, the second highest in the region. The report said both industry and services expanded very strongly in Vietnam. The rapid GDP growth rates in Vietnam have generated a large number of new jobs and the urban unemployment rate has fallen, while underemployment in rural areas appears to have decreased. The number of households under the national poverty line fell to 8.3 per cent in 2004.
However, the inflation rate more than tripled in Vietnam last year, accelerating to 9.5 per cent from 3 per cent in 2003, due to successive supply shocks. Food and fuel prices, in particular, increased sharply. In 2005, inflation rate is expected to slow down to 6-7 per cent assuming oil and food prices decrease.
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