Google

ASEANAFFAIRS
Sign up | Log in

    ASEAN PROFILES

  ASEAN KEY DESTINATIONS

Home>>Daily News>>Vietnam>>Economy>>Bright economy dimmed by public debt: report

NEWS UPDATES Asean Affairs   January 19, 2018  










Bright economy dimmed by public debt: report


Viet Nam experienced a relatively stable macroeconomic situation in 2017, in accordance with general global economic trends, but experts warned there will be obstacles to maintaining such momentum in the turbulent environment of 2018, according to a report by the Vietnam Institute for Economic and Policy Research (VEPR).

Announced at a workshop on Tuesday by Nguyễn Đức Thanh, VEPR’s Director, the independent assessment report affirmed key 2017 economic successes across sectors, mainly due to increases in exports, investment and domestic consumption.

He forecast that Viet Nam’s 2018 economic growth rate will be 6.65 per cent. This is within the 2018 targeted range, as passed by the National Assembly (NA), between 6.5 and 6.7 per cent.

With current favourable conditions maintained, other NA yearly objectives including an export growth rate from 7 to 8 per cent and average consumer price index of 4 per cent are also within reach, said Đức Thành.

Achievements such as the GDP growth rate of 6.81 per cent, exceeding the National Assembly’ annual target, improvements in the manufacturing and agriculture sectors and recovery of the service sector were also noted.

Speaking at the event, Truong Dinh Tuyen, former industry and trade minister, attributed such macroeconomic stability to the Government’s determination to enact institutional investment environment reforms.

In the same vein, Le Dang Doanh, former Director of the Central Institute for Economic Management (CIEM), said that contrary to inflation forecasts in 2017’s last quarter, the State Bank of Việt Nam’s (SBV) flexible and prudent monetary policy proved to be effective in curbing market prices.

Nonetheless, Doanh warned that the high budget deficit and public debt will continue to seriously hinder the economy. While public investment is still limited, high recurrent expenditures will be a burden on the State budget in 2018, he added.

Prominent economist Vo Trí Thanh commented that monetary policy would continue to be tightened, despite the SBV’s pledges to loosen. Still, stable systematic liquidity facilitates low interbank interest rates.

Meanwhile, economist Nguyen Tri Hieu was convinced that in 2017 the Vietnamese credit sector focused largely on industry and trade, gobbling 78.4 per cent out of total credit. This partly explains the impressive growth in the manufacturing sector as well as in the service sector.

However, he was worried that as the country’s 2017 credit-to-GDP rate was around 135 per cent, higher than other countries with similar levels of development and approaching previous instability levels. He said this could lead to the disruption of the banking system’s financial balance.

Despite positive signs, there remain potential challenges associated with macroeconomic instability in 2018, as many internal and external economic problems have yet to be thoroughly resolved, admitted Thành.

Economic problems that will remain dead-weight burdens to growth include low labour productivity, diminishing advantage of cheap labour due to the 4.0 industrial revolution’s impact, declining mining output, stagnation in the manufacturing and agricultural sector, increasing budget deficits and public debt.

Dependence on the world economy and the foreign invested sector also creates many major uncertainties for Việt Nam in 2018, relating to geopolitical developments and trade protectionism as well as rapid global technology changes, Thành concluded.

As such, Tuyển suggested that as the country stops being eligible for official development aid, foreign donors would gradually withdraw and only provide loans at preferential interest rates. Việt Nam would need to utilise internal resources as a motivation for growth.

The Government should take drastic and comprehensive policy measures to tighten recurrent expenditures and improve labour productivity in the context of the current demographic dividend, to sustain the current growth momentum, said Tuyển.

Since 2014, the VEPR’s macroeconomic reports have been published quarterly and annually with support from the Konrad-Adenauer Stiftung (KAS) to discuss trending economic issues and propose potential solutions.




Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
Online Ad Rates
Contact: marketing@aseanaffairs.com

Comment on this Article. Send them to  your.views@aseanaffairs.com

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
 
or
submit your comment in the box below



  Today's  Stories                        January 18, 2018 
• Bright economy dimmed by public debt: report Subcribe: Asean Affairs Global Magazine
• Remittances up 3.2% at $2.5B in November  Subsribe Now !
Construction project approvals up, but locals aren't reaping the rewards
Research Reports
on Thailand 2007-2008

• Textiles and Garments Industry
• Coffee industry
• Leather and footwear industry
• Shrimp industry

Lower electricity rates expected this January
Can Tho City welcomes 7.5m tourists
Asean Analysis                  October 27,  2017
• Asean Analysis October 27, 2017
Southeast Asia from Scott Circle: Indonesian Presidential Politics Begins to Heat Up 18 Months before Elections
Advertise Your Brand

Asean Stock Watch   January 17 ,  2018

• Asean Stock Watch-January 17, 2018
The Biweekly Update
• The Biweekly Update  October 27, 2017

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent
• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore • Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline • Vietnamese PM projects 10-year socioeconomic plan

ASEAN  ANALYSIS

This year in Thailand-what next?


AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

 


Name

Name


Email

Email



1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

| Terms of Use | Site Map | Privacy Policy  | DISCLAIMER |

Version 5.0
Copyright © 2006-2017 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand
asean@aseanaffairs.com