New WB Report says reenergizing medium-term growth will require renewed attention to a number of structural reforms, with focus on state owned banks and enterprises.
Taking Stock, a bi-annual assessment of Vietnam’s economy, identifies several critical risks to macro-economic stability, including: (i) low foreign exchange reserves; (ii) fragile private sector demand, (iii) possibility of departure from fiscal and monetary discipline; (iv) slow progress on structural reforms; and (v) loss of confidence in a fragile banking sector.
“With rising pressures on the budget, the government is faced with some crucial policy choices, as it seeks to balance the twin objectives of faster growth and macroeconomic stability,” notes Sandeep Mahajan, the World Bank’s Lead Economist for Vietnam.
Taking Stock further notes that progress on SOE restructuring has been slower than expected, and more work is needed to ensure that the targets chosen for SOE reforms are feasible; proper account is taken of the complexity of the issues and specificity of individual SOEs; and, oversight and coordination mechanisms are strengthened. Non-performing loans (and the uncertainty around their true measure) in the banking sector remain a major concern, and due attention is needed to issues of bankruptcy, insolvency, and creditor rights which will facilitate corporate debt restructuring.
The Report also looks at 3 special topics, namely: 1) Trade facilitation, competitiveness and growth in Vietnam, 2) Corruption and economic growth in Vietnam, and 3) Poverty and inequality in Vietnam.
Read more …
Vietnam’s Macroeconomic Stability Continues to Improve, Critical Risks Remain, World Bank Press Release, Dec 2, 2013
National Assembly approves amended Constitution, “The State economic sector plays the leading role in the socialist-oriented market economy.” Nov 28, 2013.
Chủ tịch Quốc hội: Biểu quyết về Hiến pháp trên tinh thần dân làm chủ, 28/11/2013. “Chúng tôi hiểu rằng một bộ phận trong các tầng lớp nhân dân và ngay một số ĐBQH cũng còn ý kiến khác về Hiến pháp sửa đổi. Nhưng chúng ta đã thể hiện được nguyện vọng của đa số với tinh thần làm chủ của nhân dân”- Chủ tịch QH Nguyễn Sinh Hùng nói.