VINACHEM

Further efforts to hasten economic restructuring and institutional reform will drive the Vietnamese economy in 2017, according to a report by a financial analysis group.

The group, led by economic expert Dinh The Hien, said that the economy would perform better next year.

Most international financial organisations were bullish on the Vietnamese economy in 2017.

The World Bank (WB) and the Asian Development Bank (ADB) were optimistic that economic growth in 2017 would be higher than this year. Both organisations expected the Vietnamese economy to grow 6.3 per cent in 2017, expanding from the WB’s forecast of 6.2 per cent for this year and ADB’s forecast of 6 per cent.

The National Financial Supervisory Commission even expected a growth rate of 6.7 per cent for the economy in 2017.

Only the International Monetary Fund forecast a slowdown from 6.3 per cent in 2016 to 6.2 per cent in 2017.

China’s economic problems and changes in the US’s trade policies under Donald Trump’s presidency could affect Viet Nam’s economic growth, experts said, however.

Economic expert Can Van Luc said at a recent conference that the prospect of the Federal Reserve raising rates would pressure the exchange rate.

Bad debts and budget deficit would remain significant pressures to economic growth.

At a Tuesday conference on research on Viet Nam’s economy and growth diagnostics, experts pointed out that the economy was facing three bottlenecks, namely inefficiencies in the short term, macro-economic risks in the medium term and infrastructure and human resources problems in the long term.

The group, however, said that the economic recovery would be bolstered by hastened economic restructuring to improve the business and investment climate.

The group said that economic recoveries in the US and Europe would create opportunities for Viet Nam to boost exports while the anticipated rise in foreign direct investment (FDI) would contribute to economic growth.

It forecast economic growth at around 6.2-6.4 per cent. Inflation would be higher at 5-8 per cent.

According to Vo Tri Thanh, former Deputy Director of the Central Institute for Economics Management, it was critical that Viet Nam hasten reforms.

Thanh said that the fourth industrial revolution was bringing opportunities but the drivers for growth in coming years for Viet Nam would still be manufacturing, FDI, construction and services. - VNS