Nguyen Thi Tue Anh, head of the Competition Capacity and Business Environment Department of the Central Institute of Economy Management, made the judgment at a forum held in Hanoi last week.

Agricultural production is moving in a downward trend while the industrial index has increased by only 4.8 percent, half the figure of previous years, she said.

In the past 10 months, the country’s import and export turnover stood at $93.7 billion and $93.8 billion, respectively, a year-on-year increase of 6.7 percent and 18.9 percent, she added.

At the forum, domestic economists shared reviews of Vietnam’s 2012 economy and predicted 2013 economy, which is helpful to policymakers.

Touching upon fiscal policy, Nguyen Dinh Anh from Price Market Scientific Research Institute said that it is hard to make estimates for this year’s State budget revenue because of the impacts the slump has had on the economy. This might prompt an increase in the budget deficit, resulting in an unstable macro-economy and budget spending restrictions, he added.

Presenting economic projections for 2013, participants spoke of factors likely to increase inflation, but at a modest level.

Tue Anh suggested that the country change its growth model, boost foreign direct investment attraction and improve the efficiency of the business restructure.

According to international organisations, Vietnam’s economy in 2013 will see more positive signs than in 2012. They suggested that as the year 2013 is seen as a threshold for the following years, Vietnam should focus on maintaining a sustainable macro-economy, growth, removing difficulties for enterprises, improving the employment rate, personal income and living standards of people of all classes.

According to the 2013 economic development plan, Vietnam’s economic growth will reach 5.5 percent with 10-percent export growth.

The China Post - November 27, 2012


Vietnam seeks advice on bad debt

Vietnam is reaching out for help in navigating a growing bad-debt problem.

As part of a broader economic overhaul, the government plans to ask the International Monetary Fund, World Bank and Asian Development Bank for advice on managing the debt and strengthening the financial system’s regulatory structure, prime minister Nguyen Tan Dung said Tuesday.

“This shows the country’s strong determination to reform its financial system to pave the way for sustainable economic development,” Dung said at a conference on financial stability.

It also shows the seriousness of the problem. After a lending binge, mostly to the massive state-owned sector, the amount of bad debt in the financial system has risen 66 percent this year, the central bank chief said this month. That could have prolonged “severe consequences” for the nation’s economy, he said – including by making banks reluctant to lend further.

Economic growth is expected to slow this year to its weakest pace in 13 years, at 5.2 percent, though that’s partly due to weaker demand from China and Western markets.

State Bank of Vietnam Governor Nguyen Van Binh said this month that the ratio of bad debt in the financial system stood at 8.82 percent at the end of September, up from around 6 percent at the end of last year. Some independent analysts have said it could be as high as 15 percent.

Binh said last month that the government had asked the central bank to draft a plan for an asset-management company to handle the bad debt, but the plan hadn’t been finalised.

Vietnamese officials didn’t elaborate Tuesday on plans to seek assistance and overhaul the financial system.

The government in September denied reports that it may seek loans from the IMF, saying its trade balance had improved and its foreign-exchange reserves had risen significantly.

On Tuesday, Vu Viet Ngoan, chair of the National Financial Supervisory Commission, reiterated that the government didn’t need to borrow money.

“At the moment Vietnam doesn’t need any foreign money to support its financial system,” Ngoan told Dow Jones Newswires on the sidelines of the conference.

He declared that by holding the conference – attended by representatives of the IMF, ADB and World Bank as well as the Chinese, Japanese and South Korean ambassadors – Vietnam conveys a strong message about its determination to enhance transparency in its financial system and integrate itself into global financial markets.

By Vu Trong Khanh & Nguyen Anh Thu - The Wall Street Journal - November 27, 2012