10:48 | 30/11/2019 Economy- Society
(VEN) - In the medium-term, Vietnam’s economic outlook is positive, said Jacques Morisset, World Bank (WB) Lead Economist, at a recent press conference held in Hanoi to announce the WB’s latest East Asia and Pacific Economic Update.
The report maintains its economic forecast for Vietnam that it issued in its April report. Vietnam’s gross domestic product (GDP) growth is forecast to decrease from 7.1 percent in 2018 to around 6.6 percent in 2019 and about 6.5 percent in 2020 and 2021. Compared with the April report, Vietnam is the only country in the East Asia and Pacific region, for which the WB maintains its economic forecasts unchanged for 2019-2020.
The report also indicates that Vietnam’s foreign trade continues to yield good results despite escalating global trade tensions. Economic growth and budgeting rules have been maintained, contributing to reducing the public debt-to-GDP ratio from 59.6 percent in 2016 to 54.9 percent in 2019, much lower than the highest allowed level of 65 percent.
Praising Vietnam for moving up 10 places in terms of the Global Competitiveness Index, according to a report recently released by the World Economic Forum, Jacques Morisset said this ranking reflects Vietnam’s quicker reforms compared with other countries.
Regarding foreign direct investment (FDI) flows to Vietnam in the past nine months, Morisset said Vietnam remained an attractive destination for foreign investors and attracted more FDI than other countries in the region. However, the Vietnamese government needs to take suitable measures to deal with the continuing weakness of the linkage between foreign invested and private companies in Vietnam, he added.
WB economists also warned Vietnam of its vulnerability to changes in the global economy due to the high level of trade openness and limited policy space. Escalating trade tensions and the stronger-than-expected decline of the global economy may create pressure on Vietnam’s economic growth.
The WB believes the Vietnamese government’s cautious economic policies on reducing the public-debt-to-GDP ratio will help Vietnam maintain economic growth and protect itself against unfavorable changes in the global economy.
Andrew Mason, the World Bank’s Lead Economist for East Asia and the Pacific Region: It’s time for the Vietnamese
government to double its restructuring efforts to enhance the economy’s global competitiveness and create new
investment attraction opportunities in the short term.