- June 21, 2020 7:12 AM
- January 4, 2020 4:00 AM
- July 3, 2021 4:08 PM
Strong economy seen as opportunity for ‘more ambitious’ structural reforms.
The outlook for the Vietnamese economy is sound although growth is expected to slow from its 10-year high in 2018, the International Monetary Fund (IMF) said Tuesday.
In a statement released in Washington, the fund said an IMF team led by Alex Mourmouras — division chief in the Asia and Pacific Department — visited Hanoi and Ho Chi Minh City between April 3 and 19 as part of annual consultations.
“The trade tensions and financial volatility affecting emerging economies in 2018 were also felt in Vietnam’s highly open economy, including through a stock market correction,” Mourmouras said.
“Nevertheless, the economy remained resilient and growth reached a 10-year high of 7.1 percent, with the momentum continuing in the first quarter of 2019,” he said.
“The outlook for Vietnam’s economy remains sound, aided by its strong fundamentals, diversified trade structure, and by the authorities’ commitment to macroeconomic stability and private sector-led growth.”
Soft landing expected
“However, a soft landing of growth is expected, to 6.5 percent in 2019 and over the medium term, reflecting weak external conditions.
At the same time, “inflation is expected to pick up slightly in 2019 on the back of administered price increases but should remain below the authorities’ four percent target."
Mourmouras said the strong economy was an opportunity for “more ambitious structural reforms.” These could “level the playing field for the domestic private sector, tackle economic policy distortions and capacity constraints and increase investment,” he said.
In addition, “administrative and licensing procedures should be reduced and the domestic private sector’s access to land and credit should be further facilitated.”
Information sharing and transparency
Mourmouras also proposed “greater information sharing and transparency” throughout the government and towards the public and foreign investors. Such measures “will help Vietnam reach full emerging market status,” he said.
“Ongoing efforts to address corruption are welcome,”
Mourmouras added, calling for improvements in public procurement and further strengthening of the system of income and asset declarations for public officials.