ADB: Vietnam’s economy to grow by 5.2 percent

October 03, 2013 | 10:04

(0) user say

Vietnam’s economy will grow by 5.2 percent in 2013 and pick up to 5.5 percent next year, said the Asian Development Bank in its annual Report on Asian Development Outlook released in Hanoi on October 2.

illustration photo

The modest growth was due to sluggish domestic demand and soft export markets, said Dominic Mellor, an economic expert of the bank.

The inflation forecast is revised down to 6.5 percent for this year as food price hike has decelerated more quickly than expected.

The figure is projected to step up to average 7.2 percent for the following year due to monetary easing and increased liquidity.

Transportation and real-estate services showed some improvement from 2012, but the retail and wholesale subsector softened.

Agriculture recorded modest growth at 2.1 percent, constrained by lower prices for rice and bad weather in coffee-growing areas.

On the demand side, private consumption was lackluster as business closures and layoffs over the past two years took their toll on the labour market.

Growth is expected to strengthen slightly in 2014 compared with this year. Gradual process in resolving non-performing loans (NPLs) will improve business sentiment.

As this happens, policy stimulus, including the cuts in interest rates this year, could gain traction. Some additional fiscal stimulus appears likely.

Asian-Pacific gross domestic product (GDP) is forecast at 6 percent this year, rising by 6.2 percent in 2014.