Thursday, September 20, 2007

ADB predicts Viet Nam’s economy to expand rapidly

The Asian Development Bank (ADB) said that Viet Nam’s economy will continue to expand rapidly. In the Asian Development Outlook 2007 Update (ADO Update), which was released in Ha Noi on September 17, the bank said that the Southeast Asian nation’s growth accelerated in the January-June period at 7.9 percent, which is a half percentage point faster than a year ago.

ADB Deputy Country Director to Viet Nam, Dr. Omkar Shrestha, said that Viet Nam’s economic growth for all 2007 is forecast to reach 8.3 percent, unchanged from the ADO 2007 projection, which was released in March of this year.

According to the ADB, nearly all the economic expansion in Viet Nam came from industry and services, and the dynamism of private sector is noted with expansion of 20.5 percent, more than double the pace of state enterprises.

The bank also said assuming that Viet Nam’s WTO accession will help further integrate the economy into global business networks, encourage foreign direct investment and maintain the momentum for domestic reforms; Viet Nam’s economic expansion is expected to accelerate to 8.5 percent in 2008.

Regarding the country’s inflation, the bank said the inflation rate has shown upward tendency, with 8.3 percent in 2005, 7.5 percent in 2006 and 7.3 percent in August 2007. The bank said that the inflation rate is a concern but not alarming. The inflation level is expected to be contained at 7.8 percent for 2007 and is expected to be reduced further to 6.8 percent in 2008.

According to ADB Country Director to Viet Nam Ayumi Konishi, the situation is considered to be under control, although the relatively high level of inflation calls for the Vietnamese Government’s close attention.

“What is most important for Viet Nam continues to be the acceleration of reforms and faster implementation of development projects through simplification of procedures,” he said.