April 29, 2011
IMF forecasts GDP growth of 6.3% Vietnam
In assuming the macroeconomic policies continue on track, the IMF forecast economic growth of Vietnam this year will be positive and the inflation rate can be less than double digits.
In a report recently made, the International Monetary Fund (IMF) that Vietnam has overcome the global crisis thanks to fiscal stimulus package worth around 5% of GDP and monetary easing program. Thus, GDP is growing at 5.3% in 2009 despite the significant decline of foreign investments and exports. To 2010, growth figures up 6.8% thanks to foreign and domestic demand surged.
From mid 2010 to now, a series of policies continue to be launched in an effort to stabilize the macro economy and control inflation. IMF reviews the market reacts positively to the Government's decision but still in a state of awaiting the results of the implementation.
According to the IMF assessment, the outlook for growth and inflation in 2011 depends very much on the new policy package has just given above will be successful anywhere. Overall, this year will grow at 6.25% to 6.3%, before recovering to 6.8% rate in 2012.
The IMF also recommended that the Government should be ready to tighten policy in case of necessity. The policy implementation and ongoing maintenance is expected to drastically reduce inflation, restore confidence and strengthen the position of Vietnam on the assessment of international organizations.
If the macro-economic policy on track, the outlook for 2011 looks encouraging, the IMF said. In general inflation forecast, the IMF said that Vietnam's inflation this year may at 13.5%. However, in case makers successful implementation of macroeconomic policies has just launched, inflation may stop at a figure of 9.5%, the report of the IMF Articles of Vietnam .
Earlier, in March 3 / 2011, inflation jumped to 13.9% over the same period last year, the highest during the previous 24 months and much higher than other ASEAN economies. Underlying inflation (excluding food and fuel prices) increased by 9.8% over the same period last year.
Despite the current account deficit at relatively narrow, and only near 3% increase in capital in 2010, overall balance of payments is facing deficits due to a large amount of money flowing out banking system. Although no official statistics but the IMF estimates that money is flowing out at about 13.3 billion USD (accounting for 12.3% of GDP). This figure is mainly from the desire to accumulate gold and the dollar's growing population. Also, foreign exchange reserves fell to the equivalent of about 1.4 months of imports by end 2010.
To take the official exchange rate of close to a free market, the Government decided to further reduce the cost of the additional 8.5% in February, 2011. Meanwhile, the trading band is adjusted from narrow to + 3% + 1%.
Next, the Government announced a series of policies to control inflation and increase the supply of foreign currency for the financial system. The focus of this policy package is tightening program for the purpose of reducing credit growth below 20%.
Also, in an effort to increase the supply of foreign currency to the banking system, the State Bank has banned business undertakings free gold and foreign currency reduced by the corporation held by the State. Series of plans to curb public spending are also presented, with the aim of reducing the fiscal deficit in 2011.
http://www.einnews.com/vietnam/
