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Vietnam saw modest economic growth in the second quarter of 2011 due to tight monetary policies aimed at tackling inflation, an ADB report said.
High inflation and weak global demand are major reasons for the economic slowdown
The country’s economy expanded by around 5.7% in the second quarter of 2011, according to the Asian Development Bank’s Asia Economic Monitor (AEM) report, released on July 28.
The nation’s economic growth rate is forecast to reach only 6.1% for the entire year. The figure is lower than the Vietnamese National Assembly’s target of 7.-7.5%.
Vietnam\'s GDP is expected to grow by 6.7% in 2012, according to the report.
Many emerging economies in East Asia will face the same situation through next year, ADB noted.
High inflation and weak global demand are major underlying reasons for the economic slowdown, the bank explained.
Vietnam’s inflation rate reached 20.8% in the first half of 2011, the highest in the East Asia.
VND was the only currency that depreciated in East Asian during the first half of this year. The State Bank of Vietnam devalued the dong by 9.3% in February 2011.
“Growth is easing in most of the emerging economies in East Asia as authorities wind down fiscal stimulus measures and tighten monetary policies to counter rising inflation,” said Iwan Azis, Head of ADB’s Office of Regional Economic Integration, who prepared the report.
“This is actually a good thing so stronger economies like the People’s Republic of China (PRC) don’t overheat,” he shared.
