Vietnam’s economy has shown signs of recovery with the 2014 growth rate at its fastest pace in four years and 2015 is likely to see even more robust growth, a senior economist tells Thanh Nien.
“The economy is seeing clear signs of recovery with [positive] economic indicators,” said Nguyen Dinh Cung, Director of the Central Institute for Economic Management, “Inflation is low and stable, driven by cheaper production costs, not weak consumer demand. This is good for the economy.”
“Besides, the foreign exchange rate and trade balance are stable thanks to the increases in exports and foreign reserves,” Cung said.
Gross domestic product rose 5.98 percent in 2014, the highest rate since 2011, beating the government’s 5.8 percent target. Inflation finished the year at 4.09 percent, the lowest rate in 10 years, partly due to cheaper petrol costs.
“The economy should grow between 6.2 percent and 7.2 percent like years before 2009 [when the crisis happened] to be considered to have recovered,” Cung said.
He said the recently-amended Investment Law, which narrowed the list of banned investment categories, would boost business activities in the country and make positive changes to the economy.
The amended law, approved by the parliament last November, allows businesses to engage in any practice that is not specifically illegal, instead of limiting them to the scope of commercial activity listed in their business license.
The list of illegal business activities was narrowed from 51 to 6 -- namely, the trade in prostitution, narcotics, rare minerals, wildlife, endangered plants, human beings and human reproductive materials.
Cung also said the trade deals that Vietnam may sign this year such as the EU-Vietnam Free Trade Agreement and the Trans-Pacific Partnership (TPP) would improve the local economy.
He expected the number of business shutdowns to drop this year thanks to falling bank interest rates and production costs.
Around 67,800 businesses shut down and 58,300 others suspended operations last year, citing financial stresses.