Vietnam may hit 2013 growth target

In its recent survey, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) suggested that the country’s economic growth has slowed amid cyclical and structural challenges over the past few years. 

For example, growth decelerated 5 percent last year, following rates of 5.9 percent in 2011 and 6.8 percent in 2010. 

Weak growth is a result of the need to stablise the economy and curb inflation, but is also a side-effect of heavy investment driven by State enterprises and the banking sector.

UNESCAP appreciated the Vietnamese Government’s efforts to stabilise the economy , rectify earlier expansionary policies, and control inflation from 18.7 percent in 2011 to 9.3 percent last year.

However, they noted that inflation still remains high in health services, education and transport, leaving average households exposed to large price increases. 

They also approved social measures recently introduced by the country, particularly its decision last year to raise health insurance subsidies for the poor from 50 percent to 70 percent as part of its efforts to achieve universal healthcare coverage by 2014. 

Dr Le Xuan Sang, Deputy Director of the Department for Macroeconomic and Information Studies under the Central Institute for Economic Management, said that in the past two years Vietnam’s macroeconomy has faced uncertainties including hiked inflation, decreased foreign currency reserves, sharply increased interest rates, and many cases of bad debt in real estate. 

Yet, he said that things looked brighter in the first quarter of this year, with improved growth, decreased inflation, higher foreign currency reserves, a stable trade surplus and falling interest rates. 

He emphasised that in the second quarter of this year, Vietnam should disburse State budget and issue Government bonds for key infrastructure projects to continue its growth.

UNESCAP economic affairs officer Daniel Jeongdae Lee noted that Vietnam has spent more and more money on vocational training, unemployment insurance and health care and said that such efforts to invest in people are important for long-term development. 

The UNESCAP survey revealed that the region’s economic progress has been marked by widening income inequalities and a severe depletion in natural resources, and argued that marcroeconomic policies can play vital role in reorienting the region toward a development path. 

“The 2013 survey reminds us that this is no time for complacency, as the need for a more inclusive and sustainable pattern of economic and social development continues to be critical,” wrote Noeleen Heyzer, ESCAP Executive Secretary in her preface to the survey.