VINACHEM

HA NOI (VNS) — Viet Nam's macro-economic stability continued to improve, but its economic growth remained modest and failed to match potential, the World Bank said in a report released yesterday.

According to the Update on Viet Nam's Economic Development, Viet Nam's economy will grow 5.4 per cent this year thanks to stable, foreign-direct investment inflows and strong manufacturing export.

However, it said the domestic demand remained weak as the private sector's confidence was not strong enough.

It said the bad debts of commercial banks were still high, adding that Viet Nam's economy was facing numerous challenges in competitiveness.

The World Bank called for more attention to be paid to the restructuring of State-owned enterprises and the banking system - and removing barriers on private investment.

World Bank Country Director in Viet Nam, Victoria Kwakwa, said that Viet Nam's projected 5.4 per cent economic growth was still higher than that of many countries in the region and the world. However, it did not match the country's potential.

She forecast that in the short term, Viet Nam's growth would continue at a modest pace due to weak domestic demand.

Regarding the impact of China's placement of an oil rig in Viet Nam's waters, Kwakwa said trade between Viet Nam and China was normal, although the number of Chinese visitors had dropped.

She said the Vietnamese Government had taken timely measures to assist businesses affected by disturbances caused during workers' rallies against China's violations.

This showed the Government was attentive to ensuring the safety of foreign investors, Kwakwasaid. — VNS