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Vietnam’s gross domestic product (GDP) growth may reach 6.1% this year, said an official from Asian Development Bank (ADB).
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| "In the long run, many foreign investors will select Vietnam to replace China as a source of cheap and abundant labour." |
At a press conference in Hanoi on April 6, Ayumi Konishi, ADB Country Director for Vietnam, said the Vietnamese Government’s efforts to curb inflation will help to tighten the monetary market and slow down the economic growth this year. Last September, the bank forecast for 2011 that the national GDP growth would reach 7%.
He added the country’s GDP would grow by 6.7% in 2012, when the Government’s economic policies have had time to take effect.
According to the ADB official, it would be a great challenge for Vietnam to cut its inflation rate, lowering it from the 11.75% of 2010. The country’s inflation rate will continue rising, at least in several months to come despite Resolution 11. To curb the inflation rate to single digits in 2011, the average monthly rate must be cut to 0.4% by the end of the year.
ADB\'s country economist Dominic Mellor said Resolution 11 will help boost confidence in the value of VND, thus stabilising the national economic situation. He also highlighted that, in the long run, many foreign investors will select Vietnam to replace China as a source of cheap and abundant labour.
But, he warned about some of the challenges that Vietnam is facing during its development, including inefficient investment of state-owned enterprises (SOEs), which have large amounts of capital and a big workforce, but show worse performance than private ones. The failure of Vietnam Shipbuilding Industry Group (Vinashin) is a typical example of local SOEs’ squandering investment.
Vietnam has also been impacted by global economic challenges. China’s monetary-tightening policies to reduce high inflation rate will influence the world economy, including Vietnam’s. The recent tsunami is likely to reduce Japanese foreign direct investment and official development assistance for Vietnam.
