Sebastian Eckardt, the World Bank's Lead Economist for Vietnam, speaks at the launch of the EAP Economic Update in Hanoi on October 4 (Photo: VNA)Hanoi (VNA) – The World Bank (WB)predicts Vietnam’s GDP growth this year at 6.8 percent in its East Asia PacificEconomic Update released on October 4, compared to the 6.5-percent projectionlast April.
According to the report, Vietnam’s economycontinues to perform well, propelled by the sustained global recovery andcontinued domestic reforms. Robust growth is boosting job creation and incomegrowth, leading to broad-based welfare gains and poverty reduction.
Despite improved short-term prospects, externaland domestic risks and longer-term challenges remain. These include risks ofglobal financial volatility and rising protectionism as well as domesticvulnerabilities associated with remaining banking sector weaknesses, elevatedpublic debt and limited fiscal space, and subdued productivity growth.
Vietnam’s medium-term outlook has improvedfurther, the WB said, adding that real GDP is now projected to expand by 6.8percent in 2018 (up from 6.5 percent in the previous projection) beforemoderating to 6.6 percent in 2019 and 6.5 percent in 2020 due to the envisagedcyclical moderation of global demand.
The WB expects the country’s inflation to remainaround the 4-percent government target, predicated on some tightening of themonetary stance to counter price pressures emanating from domestic input pricepressures and rising global commodity prices.
It recommends Vietnamese policymakers takeadvantage of the favourable economic environment to push ahead with policiesthat increase macroeconomic resilience and lay the foundation for sustainedgrowth in the future.
The Update said prudent macroeconomic policiesshould be accompanied by continued focus on comprehensive and deep structuralreforms, including regulatory reforms to remove barriers to and reduce the costof private sector activity, human capital and high-quality infrastructureinvestments, and further reforms to enhance productivity of the State-ownedenterprise sector.
Several provinces in Vietnam have been affectedby storms and flooding recently. Thus, investing in climate change mitigationmeasures remains a priority for reducing households’ vulnerability to shocks,according to the WB.-VNA
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