Vietnam’s economy performance not too pessimistic or optimistic

The World Bank, in its report about the Asia Pacific economies released on October 8, predicted that Vietnam would obtain the economic growth rates of 5.2 percent and 5.7 percent in 2012 and 2013, respectively, which are both lower than the figures of 5.7 percent and 6.3 percent forecast in May. GDP growth rate would be lower in 2012

If this comes true, the economic growth rate would be much lower than that in 2011 (5.9 percent) and 2010 (6.8 percent).

In fact, the low growth rate has been anticipated. Since Vietnam has gathered strength to restrain the inflation, the investment growth has been slowing down.

However, Vietnam has recently applied more flexible policies in order to rescue its businesses. As soon as the inflation rate began decreasing, Vietnam has immediately slashed the interest rate from 15 percent in late 2011 to 11 percent.

There’s a noteworthy thing found in the World Bank’s report that the average income per capita in Vietnam has been increasing very rapidly, just second to China.

The World Bank’s forecast about the low GDP growth rate in 2012 coincides with the predictions given by other financial institutions. EIU, in its September’s report, forecast that Vietnam’s GDP growth rate in 2012 would be 5.3 percent. Meanwhile, IMF has predicted the 5.1 percent growth rate for 2012 and 5.9 percent for 2013, a considerable decrease from the 5.6 and 6.3 percent rates released in April 2012.

5.2 percent is quite good: Vietnamese economists

Dinh Tuan Minh, an economist from the Center for Economic Policy Research, commented that the figure, if it turns realistic, would be "satisfactory,” which is not too optimistic or pessimistic.

"At the end of the first quarter of 2012, the GDP growth rate was believed to reach 5.7 percent by the end of the year. Later, at the end of the second quarter, the predicted growth rate was lowered to 5.3 percent. And with no breakthrough made in the third quarter, the 5.2-5.3 percent growth rate proves to be reasonable,” he said.

Regarding the World Bank’s viewpoint that the average income per capita has been increasing rapidly, Minh believes that this is just a "general and inaccurate” comment.

Minh said that the rapid income increase may occur only with some certain classes in the society, while the average income per capita has been increasing much more slowly than other regional countries.

Agreeing with the World Bank, Dr Vo Tri Thanh, Deputy Head of the Central Institute for Economic Management CIEM, said the 5.1-5.2 percent growth rate should be seen as encouraging result.

Thanh has noted that a lot of policies still could not show their effects in the third quarter. Therefore, he cannot see the "momentum” which can help make breakthroughs in the economic recovery.

In related news, a recent report carried out by independent consultancy firms showed that 69 percent of businesses still believe in the government policies to stabilize the macro economy. The businesses believe that the policies would help the national economy recover, while only 6 percent of businesses still keep worried about the future.

The report was carried out by WWB Vietnam and the PetroVietnam Finance Investment and Consultancy Joint Stock Company PTSC on 110 businesses from 10 key business fields.