Vietnam's lawmakers skeptical of reported economic growth

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A tourist walks past a clothing shop in Hanoi on October 3, 2014. Inventory and tax debts in Vietnam are up from last year. Photo: Reuters A tourist walks past a clothing shop in Hanoi on October 3, 2014. Inventory and tax debts in Vietnam are up from last year. Photo: Reuters

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The Vietnamese parliament’s economic committee has described the country's purported third quarter economic growth -- 6.19 percent – as “unconvincing”.
A recent government report failed to properly establish what pushed the economy to expand at such a remarkable rate, Nguyen Van Giau, chairman of the committee, said at a meeting in Hanoi on Thursday.
Late last month the government released the figure, which dwarfed the 5.42 percent gain reported in the second quarter, saying it had contributed to an expansion of 5.62 percent in the first nine months of this year.
Last week the World Bank forecast Vietnam’s gross domestic product would grow by 5.4 percent this year. The Asian Development Bank estimated it to be a little higher -- 5.5 percent.
Giau said his committee was skeptical about the reported economic expansion given the drop in total investments and the large number of bankruptcies.
More than 51,000 companies filed for bankruptcy and nearly 19,000 others suspended operation between January and September.
“[Even] some medium- and large-sized companies, which have struggled for several years, have had to suspend operations or declare bankruptcy. This should have negatively impacted job expansion, tax collection, bad debt relief, and economic growth,” said Giau.
He pointed out that 213,000 companies, or 68 percent of the business community, have declared losses so far this year.
Giau also noted increases in inventory, tax debts, and bad debts in the banking system compared with last year.

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