WB Optimistic of Vietnamese Economic Outlook in 2006

 

The World Bank report says the GDP growth of Vietnam remains quite high at 8 per cent in 2006. Vietnam has a very impressive growth and investment attraction. The domestic investment and export of processed industrial goods have high growth. Particularly, the processing industry has a growth rate of 12.1 per cent in the year while the industry and construction sector has a growth of 9.9 per cent.

 

Especially, the private investment has been increased sharply in the past five years and the contribution to the total social investment will be increasingly higher in the coming years. In 2006 alone, some 41,000 new businesses have been set up.

 

The fledging and small stock market has impressive expansion. To date, the size of the stock market accounts for nearly 8 per cent of the GDP. The year 2006 witnessed many landmark milestones in the development of the stock market. The number of listed firms increased from 36 in 2005 to 75 as of late November 2006. The VN-Index has more than doubled since December 2005.

 

In the first nine months of this year, the retail index rose by 20.4 per cent, compared with last year’s same period of only 19.7 per cent.

 

In 2006, the trade balance and current account of Vietnam are estimated to be at a surplus level and the forex reserves will significantly increase. In spite of negative price impacts from domestic and global markets, Vietnam has successfully kept the inflation rate under 7 per cent in 2006, lower than the economic growth.

 

Also according to this report, the admission to the WTO will enable Vietnam to attract more foreign investors in the coming time; hence, the foreign capital is forecasted to flow strongly into the country. At the same time, the application of free trade and service policies in Vietnam will enable it to have quick economic growth as well as poverty reduction. However, the Government should continue developing supporting mechanisms and adopt new policies to deal with challenges of the WTO entry.