In 2009, Vietnam’s economic growth may decline to 5% while the inflation could reduce to single digit and the non-resident payment balance will go down, the permanent representative agency of International Monetary Fund (IMF) in Vietnam forecasted yesterday.
These are the basic forecasts from the IMF delegation which was studying the economic policies of member countries, from December 3 to 18.
Concerning Vietnam’s economic situation, IMF assessed that after one-year of strong development in 2007, the country’s economic growth this year slowed down because the government had to make huge efforts to stabilise the overheated economy. Recently, Vietnam also felt the negative impact from the global economic recession despite remarkable achievements in the macro-economic stabilisation.
The declining goods and services exports showed the economic downturn of the main commercial partners. Notably, inward remittance and FDI-the two main earning sources of the Vietnamese economy in 2007-dropped because of the global economic turmoil.
External and internal challenges starting from widened trade deficit of non-resident payment balance as well as the disadvantages in the banking sector has pushed the Vietnamese economy into a very difficult situation. In such a context, the IMF delegation offered initial assessments on Vietnamese economic prospect, which are as follows:
Firstly, due to the declining world economy, IMF predicted that Vietnam’s economic growth could be down from 8.5% in 2007 to 6.25% in 2008 and 5% in 2009.
Secondly, with a reduction in prices of preliminarily processed goods, Vietnam’s inflation may fall to one-digit by the end of 2009 although the basic inflation (excluding raw food and energy) could decrease more slowly.
Thirdly, Vietnam’s import spending growth will reduce to 9% of the GDP, higher than the increase of the export turnover and overseas remittance in 2009.
IMF said that the pressures caused by prolonged global economic slide will be heavier if Foreign Direct Investment (FDI) and other capital flows are affected. Due to this, businesses and the banking system of Vietnam can have problems.
IMF also proposed that Vietnamese officials have to prepare effective solutions to deal with the increasing easily damageable points.
In medium term, the monetary fund concluded that Vietnam’s economic prospect in 2009 will still be very comfortable if the government maintains healthy policies and continues reforms to improve the country’s competitive strength.