Mai Thi Thu, director of the National Center for Socio-economic Information and Forecast (NCIF), made the statement at a conference on socio-economic forecasting for medium term planning in Hanoi on December 2.
“Vietnam’s economic growth is expected to recover strongly, buoyed by a number of factors ranging from low commodity prices to momentum from foreign-invested enterprises and external demand, coupled with institutional reforms,” Ms. Thu said.
After posting rapid growth rates, the Vietnamese economy slowed down in the 2011-2015 period, and has exposed a large number of shortcomings such as two-digit inflation, high interest rates and worrisome bad debt and overheated credit growth, she added.
The think tank drew up three scenarios for the Vietnamese economy in the next five years.
In the dominant scenario, the nation’s gross domestic growth could stand at 6.67% and inflation below 5%. The economic growth rate could reach 7.04% if the economic restructuring gains more speed and risks related to public debt and problem loans are radically dealt with.
On the other hand, if the local economy follows the current model and faces larger financial risks and headwinds from the global economy, the economic growth rate then could stay around 6% and inflation could accelerate to 7%.
To ensure the local economy grows sustainably, Dang Duc Anh from the NCIF suggested the government deal with bottlenecks in the short term such as overdue debts in the real estate market, trouble loans, productivity and corporate competitiveness.
The World Bank has revised up forecasts for Vietnam’s economic growth to 6.5% in 2015 from 6.2% previously projected. GDP growth is expected to strengthen further in 2016, underpinned by a continuing recovery in domestic demand, particularly private consumption and investment growth.