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Publication Date : 08-01-2013

Vietnam's Director of the National Centre for Socio-Economic Information and Forecasting Professor Do Van Thanh spoke to the newspaper Kinh te Vietnam & The gioi (Vietnam Economy & World) about this year's economic outlook.

How would you assess the performance of the nation's economy last year?

There were some bright spots in the overall picture. These were reflected in the stabilisation of the economy and a low inflation rate of just 6.81 per cent, below the 7 per cent targeted by the National Assembly.

The success in curbing inflation has great significance considering the figure in 2011 - nearly 21 per cent. Our domestic currency has also held its value with a stable exchange rate between the Vietnam dong and US dollar and an increase in foreign reserves.

On the dark side, however, was the low growth in gross domestic product - the lowest in several years. Production was stagnant, many enterprises entered bankruptcy, bad debt levels soared, the real estate market remained frozen, and the securities market continues to be gloomy.

Will the challenges of 2012 continue to have an impact on 2013?

The greatest challenges facing our economy in 2013 will be the stagnant production of many enterprises and the increasing levels of bad debt. We know that handling the bad debt situation is not going to be easy as the problem has been building up for several years.

In 2013, the frozen real estate market and listlessness of the securities market will continue to cripple our economy. The negative impact of high inflation in the past has also become a permanent burden on people and added to the increased unemployment rate. It is the primary cause behind low purchasing power and sluggish production. If we are not able to find solutions to these problems, it is unlikely that the economy will be able to recover in 2013.

What are the challenges facing Vietnamese enterprises this year?

The year 2013 will remain a tough year for Vietnamese enterprises without outlets for their products. In the context of the international economic slowdown, only foreign-invested enterprises saw an increase in export turnover last year. The next difficulty I should mention is the poor access to credit facing many enterprises, along with high interest rates. These problems are not easy to solve.

What is the overall outlook for the nation's economy in 2013?

Our economy has integrated deeply into the world economy. So, there's no doubt that its development depends on what happens in the rest of the world. About a month ago, the global economic outlook was very gloomy. Yet in the past two weeks, it has seen a bit of improvement. So, our economy is currently about where it was several months ago.

The Ministry of Planning and Investment has forecast that, in 2013, GDP will grow by 5.68 per cent and export turnover by 14.6 per cent.

The ministry has also come up with two other scenarios for growth - 5 per cent as in 2013 or 6.34 per cent, in the best-case scenario.

In my opinion, two important factors are vital for our economic growth: capital and international markets. If the global economy is improving, it will have a positive impact on our economy.

Whether the economic picture will be brighter than last year also will depend heavily on the Government's policy responses. Success or failure depends on Government policies and management, and I'm confident that with the Government's efforts and determination, our economy in 2013 will continue to stabilise. This is a very important condition for the plan to restructure the economy, which is fundamental for improving production efficiency and boosting growth.