ADB Forecasts High Economic Growth for Vietnam

The Vietnamese economy is expected to grow 7.8 per cent this year and 8 per cent next year, an Asian Development Bank (ADB) official said while adding that the country is a star in Southeast Asia.

 

Growth in private investment, strong consumption, and robust exports are driving such a dynamic economy like Vietnam, Ayumi Konishi, the bank’s country director in Vietnam, told a meeting in Hanoi Wednesday to introduce the Asian Development Outlook (ADO) 2006 Update.

 

Improvements in the country’s business climate and its expected membership of the World Trade Organization (WTO) are believed to fuel its strong economic growth, said the bank official.

 

ADO Update stated that allowing the country greater access to international markets upon implementing commitments related to the Association of Southeast Asian Nations Free Trade Area (AFTA) and the WTO accession would offer Vietnam opportunities for further export growth. It forecast Vietnam’s export revenues to increase by 18 per cent in 2007.

 

Omkar Shrestha, ADB’s chief economist in Vietnam, even said with the current circumstances Vietnam can achieve economic growth of over 8 per cent and may become a super star of Asia.

 

However ADB also worried over increased inflation pressure regarding rising prices of petroleum, food, construction materials and transport in the developing country. The bank projected that Vietnam would face an inflation rate of 8.3 per cent this year and 7.8 per cent in 2007.

 

According to ADB, to foster its economy, the communist-ruled country should crack down corruption, speed up equitisation of large state-owned enterprises, and utilize all human and capital resources.

 

Vietnam targets to expand its economy by 7.5-8 per cent annually between now and 2010.