ADB raises forecast on Vietnam’s economy

Ayumi Konishi, ADB country director for Vietnam, gestures while speaking to the press at the launch of the Asian Development Outlook 2010 Update (ADO Update) in Hanoi on Tuesday - Photo: TTXVN

HCMC – The Asian Development Bank raised its growth forecast for Vietnam’s economy in the Asian Development Outlook 2010 Update (ADO Update) launched on Tuesday.  

The report says Vietnam’s economic growth is expected to reach 6.7% this year, slightly higher than ADB’s earlier forecast, and for 2011 from 6.8% to 7.0% while lowering the inflation projection in 2010 to 8.5% and 2011 to 7.5%, respectively.  

“Since the last press conference on Asian Development Outlook 2010 in April this year, Vietnam has consolidated its macroeconomic stability, and as a result we are making upward adjustments in our growth forecast for both 2010 and 2011, while lowering the projections for inflation,”  Ayumi Konishi, ADB country director for Vietnam, said in a statement.  

The report notes the steps taken by the Government to stabilize economy have contributed to an improvement in the external and foreign reserves positions. With an improvement in the capital account, the overall balance of payments likely turned to a small surplus in the second quarter 2010 after recording deficits since the start of last year.

Economic growth quickened in the second quarter. Especially the two laws approved by the National Assembly in June 2010 – a new Law on the State Bank of Vietnam (SBV) and a Credit Institutions Law – together with various legal documents issued by SBV and other agencies, mark important progress in strengthening the framework for monetary policy implementation and safeguarding banking system stability.  

Vietnam, however, needs to be cautious in maintaining macroeconomic stability and effectively communicating such a policy stance to the public while accelerating reforms to prepare for the next ten-year period as a new Middle Income Country, according to the report.

“Vietnam should continue its efforts to ensure a better understanding of its policy stance by the public at large, supported by greater and timely availability of information and statistics. This applies not only to the Government but also to the corporate sector,” Konishi said.  

“In order to promote better corporate governance of both public and private enterprises, quality and timeliness of information to be made available to the owners or shareholders and potential future investors will be the key.”

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ADB raises forecast on Vietnam’s economy

Ayumi Konishi, ADB country director for Vietnam, gestures while speaking to the press at the launch of the Asian Development Outlook 2010 Update (ADO Update) in Hanoi on Tuesday - Photo: TTXVN

HCMC – The Asian Development Bank raised its growth forecast for Vietnam’s economy in the Asian Development Outlook 2010 Update (ADO Update) launched on Tuesday.  

The report says Vietnam’s economic growth is expected to reach 6.7% this year, slightly higher than ADB’s earlier forecast, and for 2011 from 6.8% to 7.0% while lowering the inflation projection in 2010 to 8.5% and 2011 to 7.5%, respectively.  

“Since the last press conference on Asian Development Outlook 2010 in April this year, Vietnam has consolidated its macroeconomic stability, and as a result we are making upward adjustments in our growth forecast for both 2010 and 2011, while lowering the projections for inflation,”  Ayumi Konishi, ADB country director for Vietnam, said in a statement.  

The report notes the steps taken by the Government to stabilize economy have contributed to an improvement in the external and foreign reserves positions. With an improvement in the capital account, the overall balance of payments likely turned to a small surplus in the second quarter 2010 after recording deficits since the start of last year.

Economic growth quickened in the second quarter. Especially the two laws approved by the National Assembly in June 2010 – a new Law on the State Bank of Vietnam (SBV) and a Credit Institutions Law – together with various legal documents issued by SBV and other agencies, mark important progress in strengthening the framework for monetary policy implementation and safeguarding banking system stability.  

Vietnam, however, needs to be cautious in maintaining macroeconomic stability and effectively communicating such a policy stance to the public while accelerating reforms to prepare for the next ten-year period as a new Middle Income Country, according to the report.

“Vietnam should continue its efforts to ensure a better understanding of its policy stance by the public at large, supported by greater and timely availability of information and statistics. This applies not only to the Government but also to the corporate sector,” Konishi said.  

“In order to promote better corporate governance of both public and private enterprises, quality and timeliness of information to be made available to the owners or shareholders and potential future investors will be the key.”

Related Articles

• ADB raises forecast on Vietnam’s economy
• Vietnamese SMEs upbeat about economy: survey
• IFC: Vietnam needs to increase PPP to support economy
• Vietnam’s economic growth quickened to 7.16 pct
• Vietnam to relax bank lending rules to boost loans

Economists cut U.S. growth forecast again

Projected US economic growth for the rest of this year and next was revised down for a third month in a row by a panel of about 50 economists.

The latest Blue Chip Economic Indicators report Thursday said the weaker outlook for second-half 2010 growth stemmed from lower expectations for consumer spending, business investment and private construction.

"Growth in the current quarter now is expected to be little better than the disappointingly soft advance registered last quarter," the survey said. Gross domestic product grew at a meager 1.6 percent annual rate in the second quarter, less than half the first quarter's 3.7 percent rate.

But the economists' group said that, after the mid-year soft patch, it saw a gradual improving trend setting in with growth slightly surpassing trend rate in the second half of 2011.

Blue Chip defines GDP trend growth at about 2-3/4 percent a year.

"For all of 2010, real GDP now is forecast to increase 2.7 percent on a year-to-year basis, 0.2 of a percentage point less than a month ago and 0.6 of a point less than predicted in June," the survey said.

Its consensus forecast for real GDP growth in 2011 was cut by 0.3 of a percentage point from a month ago to 2.5 percent.

"Given the depth of the recession, a forecast of roughly trend growth this year and next amounts to a very disappointing pace of recovery, with little progress expected to be made in lowering the unemployment rate," the forecast said.

Its consensus forecast is that the U.S. unemployment rate will end this year at 9.6 percent and fall only to 9 percent by the end of 2011.

It forecast that after averaging 554,000 new housing units in 2009, starts this year will rise to 600,000 and to 760,000 units in 2011. "Although residential investment appears destined to subtract from GDP in the second half of this year, double digit growth is expected by early 2011, with rates of growth over 30 percent by the second half," Blue Chip said.

The economists said they expect short-term interest rates to remain very low before starting to rise next summer. They said the Federal Reserve -- the U.S. central bank -- likely will keep the federal funds rate at its current range of zero to 0.25 percent through mid-2011, finally raising it to 0.75 percent by the end of 2011.

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