World Bank revises forecast to 5.5%

Compiled by Trong Khuong

The World Bank lowered its forecast for Vietnam's economic growth this year to 5.5 percent from 6.5 percent but said Vietnam was better placed than most countries to ride out the global crisis.

“To cope with the global economic turmoil, Vietnam made a lot of effective adjustments last year and that positions Vietnam better than other countries," World Bank Lead Economist in Vietnam Martin Rama told a press conference in Hanoi on Tuesday.

The World Bank’s forecast is higher than the Vietnamese government and the Asian Development Bank’s forecast for economic growth this year.

Last week the Vietnamese government lowered its 2009 economic growth forecast to 5 percent and the Asian Development Bank issued a more subdued forecast of 4.5 percent, while Standard Chartered Bank expects Vietnam’s economy to expand by 4.2 percent this year.

In its “East Asia and Pacific Update - Battling the forces of global recession” report, also released Tuesday, the World Bank said the risk of Vietnam’s financial sector experiencing a crisis was low and the direct impact of the global financial crisis on Vietnam was minimal, as banks in Vietnam were not exposed to “toxic” assets.

The risk of Vietnam’s financial sector experiencing a crisis was low and the direct impact of the global financial crisis on Vietnam was minimal

World Bank report

Rama said the Vietnamese government’s stimulus package, announced in December last year, had already had an effect.

The country’s high export growth in the first quarter was “encouraging,” especially when compared to the 20 percent to 50 percent decline in exports experienced by some Asian nations, he said.

Rama said the Vietnamese government’s plan to increase the budget deficit to 8 percent of gross domestic product wasn’t a concern as government debt was under control.

He said the government should concentrate on ensuring official development assistance (ODA), including World Bank low-interest loans, was disbursed effectively.

Vietnam should also closely monitor to public investment and fiscal stability, which are key drivers of the economy, Rama said.

Source: Tuoi Tre

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