Saturday, December 20, 2008

IMF urges Vietnam to scrutinise stimulus plan

The International Monetary Fund (IMF) has suggested that Vietnam thoroughly consider its economic stimulus plan and give priorities to such vulnerable groups as the business and banking sectors.

The IMF made the recommendation in a notice released on December 18, following a week-long Vietnam visit by an IMF working mission led by Shogo Ishii, Assistant Director of the IMF’s Asia and Pacific Department.

The IMF forecasts that Vietnam ’s economic growth rate will reach 6.25 percent in 2008 and may reduce to 5 percent next year due to the worsening global economic environment, said IMF Senior Residential Representative in Vietnam Benedict Bingham.

Vietnam ’s trade deficit is expected to go down in the following year but will remain high, accounting for around 9 percent of GDP, he added.
The IMF experts also predicted the country’s inflation rate to decrease to a single-digit level by late 2009, leading to the government’s loosened monetary and financial policies. However, Vietnam ’s position in the international arena is not so strong compared to some regional countries, which may restrict the government’s capacity in pursuing those policies, they said.

The IMF mission, however, noted that Vietnam ’s outlook remains positive given that the government maintains sound policies and continues reforms to increase the country’s competitiveness.

Maintaining reforms in this difficult period is very important for Vietnam to bolster investors’ confidence and ensure a better position for the country when the world escapes from the current economic recession, Benedict said in conclusion.