Vietnam's GDP to Reach Eight Per cent in 2005

Vietnam's GDP to Reach Eight Per cent in 2005

The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) in its recent economic and social survey entitled 'Dealing with Shocks,' which reviews the impacts of shocks, Tsumani, persistent high oil prices, a flat US dollar, and China's continued high growth rate, predicted Vietnam's GDP growth rate would reach eight per cent in 2005.

According to ESCAP, Vietnam and Indonesia will be the only two countries in Southeast Asia to maintain a high growth rate with a high year-on-year increase. In 2004, Vietnam recorded a 7.7 per cent GDP growth rate. It is forecast that this figure would reach eight per cent in 2005. Meanwhile, other countries in the region, such as Thailand, Singapore, the Philippines and Malaysia, may see their 2005 growth rate one per cent down against that of 2004. 

Vo Tri Thanh, head of the Department of International Economic Integration of the Central Institute of Economic Management, said that to gain a target of a growth rate of 8.5 per cent in 2005 as set by the Government, Vietnam would have gain a growth rate of nine per cent in the three remaining quarters. This will be the highest growth rate in Vietnam in ten years.

Challenges for economic development in the coming time in Vietnam and other countries in Asia-Pacific include a risk of increased unemployment among young people. The number of unemployed young people in Asia-Pacific is equal to 50 per cent of the world’s figure.

According to the survey, Vietnam doesn’t have to cope with the risk of an aging population that many countries in Asia-Pacific, such as China and Japan, are facing. Thanh said that it was an advantage Vietnam should take into account to reduce unemployment in the future.

To that end, Thanh said that Vietnam should open the door for foreign investors for a labour shift. For example, the establishment of nurseries for foreign elderly people should be allowed to create more jobs for young nurses and doctors.

However, Vietnam has yet to achieve targets within its millennium goals. Further efforts should be exerted in the future to reduce the spread of HIV and malnutrition among children.       

Thanh went on to say that it was not necessary to obtain high GDP growth rates by any means possible, leading to macro-economic instability. Experts said that the best way for Vietnam's GDP to grow was based on a growth in mobilising capital from the private sector and foreign countries instead of the State’s investment, which is facing many problems, including complicated administrative procedures and corruption.

Mai Anh