Vietnam's economy is expected to post annual growth of 6.55 percent this year, Prime Minister Nguyen Tan Dung said on Saturday, accelerating from the 5.98 percent growth posted in 2014. Vietnam has projected growth of 6.5 percent to 7 percent a year in the 2016-2020 period, Dung told foreign donors and diplomats in an international conference in Hanoi, in line with a development roadmap drafted by the ruling Communist Party.
He said Vietnam was committed to securing faster and more sustainable economic growth, development of culture and social equality, protecting the environment and extending the reach of the market economy. "In the next five years, along with opportunities and favourable conditions, Vietnam will also face major challenges and difficulties," Dung said.
Dung noted Vietnam's lack of competitiveness and low productivity put it at a disadvantage in penetrating export markets, particularly given the slow recovery in the global economy. Still, Vietnam has been among Asia's stronger performers due to robust exports, solid growth in manufacturing - mostly electronics and textiles - and expected record levels of foreign investment, with inflows boosted by the country's accession to the Trans-Pacific Partnership agreement (TPP) and other trade pacts.
Last month, Vietnam concluded negotiations in the 12-country TPP and has earlier this week signed a free trade agreement with the European Union. Vietnam's productivity growth rate is below 4 percent and declining, Victoria Kwakwa, World Bank director in Vietnam, told the conference, noting that it was significantly below levels seen in China and South Korea when those countries were at a similar stage in their development. "Current productivity growth rates are unlikely to deliver the sustained rapid growth that could see Vietnam follow the development trajectory like Korea or Taiwan," Kwakwa said. Vietnam will need to rely more on internal resources to finance its development agenda by enhancing expenditure efficiency, avoid building up unsustainable debts and use official development aid more effectively, the World Bank said.
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