Vietnam’s President Sang says low growth a must while restructuring

Jan 22, 2013. Vietnam must accept “low” economic growth while it restructures its economy and should aim for annual expansion of at least 5 percent, according to President Truong Tan Sang.

Growth less than 5 percent would be “dangerous,” and spur high unemployment, Sang said in a Jan. 21 interview with Vietnam News Agency, the official state media. The country should try to gradually boost growth to 7 percent to 8 percent and stabilize the macro-economy, he said, without specifying a time frame.

Vietnam’s economy expanded at the slowest pace in 13 years in 2012 as a slump in bank lending damped domestic demand, adding pressure on the government to revamp the financial system and attract more foreign investment. Gross domestic product rose 5.03 percent last year, down from 5.89 percent in 2011.

The World Bank is concerned about the country’s monetary policy loosening as it faces the risk of double-digit inflation in 2013, Deepak Mishra, the lender’s lead economist for Vietnam, said today at a business meeting in Ho Chi Minh City.

Weaknesses in the economy include the “low” quality of the country’s workforce, Sang said. “We ourselves, who manage and lead the country, have not created a favorable business environment and have not trained a high-quality workforce for companies,” he said in the interview.

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About the author  ⁄ AmCham Vietnam

AmCham is an independent association of companies with the objective of promoting trade and investment between Vietnam and the U.S. With two chapters, one in Ho Chi Minh City and one in Hanoi, our membership of 700 companies and 1,500 representatives is unified by a commitment to promote trade and investment between Vietnam and the United States.

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