Vietnam will continue the growing-up phase in its economic cycle, in 2006, the IFM country director in Vietnam Il Houng Lee told State media during a end of year exclusive interview.
Lee’s forecast is based on the country’s positive economic indexes in 2005. According to local statistics, Vietnam is earning a GDP growth rate of 8.4 per cent to US$52.6 billion, a FDI increase of 38 per cent to US$5.8 billion and export value up 21.6 per cent to US$32.23 billion so far this year.
The IMF country director noted that Vietnam’s economic growth this year is attributed to the positive growth in domestic demand, particularly in investment.
“Domestic investment from both State-owned and private areas is rising by 26 per cent this year, creating a strong momentum for the nation’s economic jumps,” Lee said, adding that the record hike of domestic consumption requires Vietnam to cut down outbound deposit for homeland investment.
Among production sectors, he said, the service sector is making the strongest rise with telecommunication topping the rank whilst industry, electricity and fertilizer are posting remarkable surges. Notably, the fertilizer’s development has made a significant contribution to reducing the import turnover of the country.
Regarding Vietnam’s FDI prospect, Lee said that with politic stability, an active economy, and being a safety destination for foreign investment as well as its close vicinity to China, which is the largest and the rare increasing FDI receiver in Asia in 2005, in addition to the government’s commitments to reforms and Vietnam’s high possibility in joining the WTO, it will find it more feasible to attract FDI.
However, Lee also warned of the standstill FDI disbursement although local government reports that total FDI put into operation this year is expected to reach US$3.3 billion, up 15.3 per cent against 2004, marking the highest level in terms of capital and growth since the Asian financial crisis in 1997.
Lee, once more, shared the same view with other international economist experts in saying that the record ODA committed by donors to the country in 2006 reflects the confidence of the international community in the communists’ economic reforms.
On the other hand, he said, the figure exposes an anxiety over the large coverage of Vietnam’s social program with ODA quite focused on poverty reduction.
In addition, the IMF official also pointed out some challenges facing Vietnam in the coming year.
“Due to the loosening of macro-economic policies, which were aimed to boost the economic growth rate in the second half of 2005, Vietnam is facing the threat of too hot growth,” he said.
“This is revealed in the inflation rate and high demand of imports,” Le said.
According to local sources, Vietnam’s CPI, or inflation rate, rose by 8.4 per cent this year, going far beyond the initial target, which the National Assembly set at 6.5 per cent early this year.
Concluding the interview, Lee doubted whether the government would introduce similar solutions to kick off the economic growth to fit its expenditure and boost credit development in 2006.
MPI Website
April 24–25, 2026
Kinh Bac Cultural Center, Bac Ninh Province
Vietnamese
