The nation may amass heavy debts as a result of the North-South Express railway project, World Bank has warned Vietnam.
Prior to the June 9 meeting of the Vietnam Consultative Group (CG) in Rach Gia City, Kien Giang Province, Martin Rama, World Bank’s Chief Economist in Vietnam, revealed that the organisation would not play a role in the North-South Express railway project, currently under review by the Vietnamese National Assembly.
Vietnam has coped with the global crisis more successfully than other countries, said Rama, thanks to swift government response in the form of economic stimulus packages. He cautioned that the target 2010 inflation rate, as set by the National Assembly, can be a challenge for Vietnam, but it can be maintained in the single digits. The persistence of high interest rates could threaten the country’s potential economic recovery; consequently, he predicted that interest rates will have to be reduced in the future.
Rama added that Vietnam continues to combat currency devaluation as a result of its failure to take advantage of the recovery of international capital sources, by which other countries have been able to boost the value of local currency through increased capital flow. Nevertheless, 2010 will be an abundant year for Vietnam if the Gross Domestic Product (GDP) reaches 7 per cent and the inflation rate doesn’t surpass 9 per cent, he said.
Vietnam should closely scrutinize the “super bullet” train project in terms of economic restructuring, recommended the Chief Economist at the CG meeting.
According to the organisation, there are four principle factors that Vietnam should examine as it considers implementation of the express railway: GDP in coming years, financial flow, sponsors’ loan policies, and existing infrastructure.
Source: dtinews.vn