Illustrative image (Source: VNA) Director of the Vietnam Institutefor Economic and Policy Research under the Vietnam National University’s University of Economics and Business Nguyen Duc Thanh made thecomment during a ceremony in Hanoi on January 16 to release the macroeconomicreport for the fourth quarter of 2016.
The report warned of thepossibility of the US Federal Reserve’s interest rate hike three times thisyear, which could push up the USD rate in Vietnam, thereby hurting Vietnam’sexports and deteriorating trade deficit.
In order to maintain the value ofVietnamese dong in the context of rising USD rate, the State Bank of Vietnamcould increase deposit rates but this could pose risks and cause a rippleeffect to the real estate sector, it said.
Another concern is that major oilproducers’ production cut since January 2017 could raise oil prices again. Onthe plus side, it could add more revenues to the State budget but alsopotentially put pressure on domestic inflation which has been higher recentlydue to the adjustment of public service prices.
Thanh said the 6.7 percent growthtarget this year is high and an under-4 percent inflation is not easy toachieve, suggesting that achieving growth target be done with “patience overhaste” policy in order to prevent a relaxation in stabilising the macro-economy.
The report also forecast that theeconomy could expand nearly 6.4 percent while inflation could reach 5.9 percentthis year, with the business sector, especially manufacturing and processing,being a bright spot.
The government’s resolutions 19and 35 are also expected to cut down cumbersome administrative procedures andsupport private businesses.-VNA
VNA
