Solid outlook for economy in 2010
by Thuy Anh
HSBC is optimistic about the out- look for Viet Nam’s economy next year, as signs of recovery from the global recession emerge in the country, the region and the world.
Senior economist Robert Prior-Wandesforde of the bank told a seminar last week that Viet Nam might achieve a GDP growth rate of 6.8 per cent next year, compared to the 4.7 per cent anticipated for 2009.
“We forecast that Viet Nam’s GDP will grow 6.8 per cent in 2010 as its fundamentals are still strong: a young population, a large portion of people which can move from low productivity to high productivity, a bigger domestic market, a successful stimulus package, and a strong commitment from the Government to support the development of the economy with timely and effective fiscal measures” he said.
“Other recovering markets will create a favourable context for the export industry in Viet Nam. Exports will grow as the world’s market expands from 2008 figures. In the next five to 10 years, the GDP growth of Viet Nam will be around 7 per cent to 7.5 per cent and among the top ten of the world’s fastest GDP growth countries,” he said.
However, he also cautioned that inflation was already picking up.
“This is an inevitable issue and is a result of factors including commodity price increases, credit growth, and the rise of international food and energy prices,” the economist noted.
Prior-Wandesforde said construction and industrial sectors are likely to enjoy the highest growth by the end of 2009 and in 2010. The Government’s stimulus package also focuses on improving infrastructure and investment in infrastructure which will last for many years, not only in the year that those projects were implemented. Thus, even when the stimulus package ends, its positive effects will continue.
HSBC’s optimism finds an echo in the report submitted to the Government by the Ministry of Planning and Investment on the socio-economic situation in 2009 and plans for 2010. According to the ministry, the country may set a target of 6.5 per cent GDP growth for the coming year.
Several other foreign institutions have also made adjustments to their previous predictions for Viet Nam in 2010. While the Business Monitor International has pushed up its growth estimate from 5 to 5.5 per cent, Credit Suisse has pushed it up to 8.5 per cent from the previous 6.5 per cent.
Power shortages
While supply remains insufficient, Viet Nam’s power consumption is likely to increase by 3.5 times within the next decade, which poses a challenge that needs to be addressed right now, according to the Japan International Cooperation Agency (JICA) .
Kimio Yoshida, head of JICA’s research group tasked with formulating a master plan of conservation and effective use of energy in Viet Nam, said during a recent seminar on energy conservation in HCM City that the country was the third largest power consumer in Asia after only China and Indonesia. It needs to implement necessary measures to conserve and use energy effectively.
According to the Office for Energy Conservation of the Ministry of Industry and Trade, the country has some 3,800 high-rise buildings and large commercial centres. However, 95 per cent of them have not yet factored energy conservation standards into their initial architectural designs.
To tackle the looming power demand, the country is building several new thermal and hydropower plants. These projects can have negative impacts on the environment and the community, and contribute further to global warming.
Viet Nam has launched a national programme for using energy economically and effectively.
Renewable energy sources like wind, solar power and biofuels should therefore be strongly encouraged, the Japanese agency advised.
Prime Minister Nguyen Tan Dung has approved the generation of up to 20 per cent of the country’s output through nuclear power by 2050. The Government is expected to report to the National Assembly details of the country’s first nuclear power plant project next month. —
Source: vietnamnews.vnagency.com.vn
Bao Viet Nam 