The country’s maximum economic growth would be 5.35 per cent this year, according to the Viet Nam Annual Economic Report 2013 that was unveiled in the capital on May 27.
The report, compiled by the Viet Nam Centre for Economic Policy Research (VEPR), said the country’s economic growth this year would go two ways. In the first scenario, economic growth would hit 5.04 per cent if inflation was 4.95 per cent and in the second, if inflation reached 6.64 per cent, economic growth would reach 5.35 per cent.
The document reflects concerns about the country’s economic restructuring that has slowed down in comparison to two years ago. It also mentioned opportunities that Viet Nam could miss if reforms were not taken.
It shows that Viet Nam hasn’t comprehensively capitalised on international integration. After six years as a member of the World Trade Organisation, the country’s economy reached a growth rate of only roughly 5.8 per cent on average against the average rate of 7.8 per cent in the previous six-year period from 2002 to 2007. Inflation from 2002-07 was also only 7.35 per cent against 11.5 per cent from 2008-13.
“Viet Nam missed many opportunities to gain economic growth through restructuring the economy,” the report wrote.
It also suggested that the country’s economic model should be scrutinised to form a new model.
Viet Nam would miss the opportunity to progress on a smooth path if a new economic model and suitable supporting policies were not taken, the report states.
Nguyen Duc Thanh, director cum chief economist of the VEPR, said that Viet Nam’s economy was like a ‘heavy carriage’ on a bumpy road.
According to the report, Viet Nam needs to deal with short- and medium-term issues including non-performing loans in the banking system, the frozen real estate market and difficulties facing enterprises.
The report also mentioned long-term measures to boost the economy, including improving the business environment and reviving investors and public confidence as well as reducing administrative measures and State intervention in economic execution.
Chairman of the National Financial Supervisory Commission Vu Viet Ngoan said that the report was a practical reflection of the country’s economy.
Ngoan said that he agreed with the recommendations made in the report that both short- and long-term measures should be combined.
Economist Le Dang Doanh suggested that the report should consider more carefully public debt in the European Union and the EU’s measurers to deal with the crisis, explaining that those lessons could be applied in Viet Nam.
This is the fifth year the VEPR has published the Viet Nam Annual Economic Report.