Mr Rama said that as driving at high speed,
WB Vietnam Country Director Ajay Chhibber and Mr Rama affirmed that
Mr Rama emphasised that the economic growth rate coincided with the improvement of competitiveness. Exports have been growing more rapidly than the GDP, not counting crude oil exports.
The high engaged foreign direct investment capital (FDI) of $16bil this year is seen by the chief economist as an encouraging result. This figure includes the $5bil of implemented projects. According to Mr Rama,
According to WB, the trade deficit in 2007 will be higher than in 2006 as imports are growing more rapidly than exports. However, Mr Rama said that the trade deficit was not really a worrying problem, as
Regarding foreign debts, Mr Rama said that most of the debts were preferential loans which
Inflation and monetary policies
By the end of November, the inflation rate had exceeded the 10% threshold, of which food and foodstuff accounted for 43% of the CPI increase.
Mr Rama applauded the decision by the government of
Regarding inflation, Mr Rama said that it was partially because of monetary policies. He said that the 40% credit growth rate proved to be overly high for a national economy with the growth rate of over 8%. He also said that the government’s policies did not suit the forex policies when it purchased too many dollars in order to maintain the exchange rate of VND16,000/US$1.
The exchange rate benefits exports, but it has led to higher inflation since
Worries about too many new financial companies
While applauding the rapid equitisation process, the WB economist expressed his concern about the fact that a lot of leading Vietnamese leading groups were rushing to diversify their business fields.
When a group makes investment in an unfamiliar field, it faces a lot of risks, and the success index is lower.
Mr Rama also warned about the risks groups face when setting up finance companies. The government should keep an eye on the finance companies.
Monday, December 03, 2007
Vietnam’s economy like fast motorbike: WB VN Chief Economist
Martin Rama, Chief Economist of the World Bank Vietnam, when presenting WB’s report about
Vietnam’s economy, described ’s economy as a motorbike running very fast at 200 km/h. Vietnam
Posted by Saigon Charlie