Institute forecasts 2008 inflation at over 22%
10-MAY-2008 Intellasia | Nguoi Lao Dong
May 10, 2008 - 7:10:00 AM
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"Vietnam Economic Report 2007 and Prospect 2008" announced yesterday by The Central Institute for Economic Management (CIEM) showed that the targets of economic growth at 8.5-9% and inflation control at 11-12% in 2008 cannot be reached and it is forecasted that CPI this year could jump to 22.3% if the economy continues facing disadvantages.
Dr Vo Tri Thanh, chief of CIEM's Macro Policy Study Committee said that last year the economy grew by 8.5%, marking the highest level during the last decade but the quality of economic growth contained many problems. Firstly, Vietnamese economy has relied on foreign capital because the foreign investment accounted for 44% GDP last year. In which, private investment ratio reduced from 37% in 2006 down to 31% in 2007 whereas FDI capital surged from 17% in 2006 to 21% and SOEs' investment capital accounted for 27% of total social investment. Secondly, 2007 also recorded the breakout of capital markets but the finance, banking and insurance market still only made up less than 2% GDP against 1.9% of 2004 to 2005. The figure showed that the breakout was only move of virtual money amount.
The report also pointed out that Vietnam's WTO entry is showing weakness and inherent adequacies of the economy, including mechanism, infrastructure and human resources.
Moreover, through the report, Vietnam targets to reach GDP growth of 7.6%, average inflation at 16.7% and trade deficit only at below 17.3% GDP in 2008.
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