Vietnam economy not out of the woods yet

October 04, 2011 | 09:15

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A meeting of the National Assembly Standing Committee last Saturday saw the release of a less than optimistic economic forecast for the next five years.

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Minister of Planning and Investment Bui Quang Vinh said despite the government’s recent efforts, the economy remained unstable, warning it could run into rough weather at any time in that period.

Many businesses had been forced to scale down or even went bankrupt. Some 48,700 businesses had dissolved or shut down in the year to date due to losses, according to data available with the ministry September.

The figure was 21.8 per cent higher than previous year, and the high lending rate had been the main culprit.

The economy would continue to face difficulties in 2012, with the GDP only likely to grow at 6 per cent. Inflation would be below 10 per cent.

The Ministry of Planning and Investment had laid out two scenarios for economic development between 2011 and 2015, offering a choice between 6.5 per cent growth and 7 per cent growth.

The government had chosen to set the latter target.

Only VND225 trillion ($10.9 billion) could be raised by issuing government bonds while VND500 trillion would be needed for public investment between 2011 and 2015, so many projects would be delayed until 2016.

The government was also willing to convert some public projects to build traffic infrastructure, hospitals, and student dormitories into build-operate-transform (BOT), build-transfer (BT) or public-private partnership (PPP) mode.

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