In its Asian Development Outlook 2012 (ADO), launched on October 3, the Asian Development Bank (ADB) lowered Vietnam’s growth forecast to 5.1 percent for 2012 and 5.7 percent for 2013, in light of the weakness in external markets and domestic credit. Inflation is projected at about 7 percent by end of 2012.
That would put the year-average rate at 9.1 percent, lower than previously projected because of sharp decline in food prices and weaker-than-anticipated domestic demand. By the end of 2013, inflation is forecast to quicken to 9.4 percent because of increases in global food prices and pickup in domestic demand, while fiscal policy is likely to be relaxed.
The pace of economic growth will likely be influenced by progress in addressing financial sector vulnerabilities. Cycles of rapid credit expansion followed by policy tightening and downturns in economic growth, together with property weakening, have put the banking sector under increasing stress, ADB said.