Categories: Asia PacificFinance

World Bank: Vietnam Sees Early Signs of Economic Recovery

Hanoi, Vietnam

Hanoi, December 3, 2014 – Early signs show that Vietnam’s economic recovery is on track, says the World Bank’s Taking Stock report, released today. Vietnam’s economic growth is expected to improve from 5.4 percent in 2013 to 5.6 percent in 2014.

This positive outlook is largely due to the country’s ongoing macroeconomic stability and continued strong performance of the foreign-invested manufacturing export sector. Positive macroeconomic conditions contributed to Vietnam’s improved sovereign risk ratings, enabling US$1 billion of government bonds to be issued on international capital markets on favorable terms.

“Vietnam’s potential for much more rapid growth can only be realized if substantial progress is made in addressing distortions such as in the state enterprise and banking sectors, that tax the economy’s efficiency and productivity,” says Victoria Kwakwa, World Bank Country Director for Vietnam. “Stepping up this reform agenda and strengthening the business environment are critical for moving forward.”

The report finds that underlying the broad pattern of economic recovery, the performances of foreign-invested and domestic firms remain dichotomous. The foreign-invested sector continues to be a significant source of growth, while the domestic private sector remains subdued, as reflected in the rising number of domestically-owned businesses that have closed or suspended operations.

“Vietnam’s potential for much more rapid growth can only be realized if substantial progress is made in addressing distortions such as in the state enterprise and banking sectors, that tax the economy’s efficiency and productivity.”

Victoria Kwakwa, World Bank Country Director for Vietnam

Over the medium term, Vietnam’s macroeconomic outlook is good, with continued modest GDP growth and a further consolidation of macroeconomic stability. The outlook is subject to two key risks: (i) relatively slow progress on SOE and banking sector reforms could adversely impact macro-financial conditions; (ii) adverse turn of events in the global economy could undermine Vietnam’s growth prospects, given the relatively large size of the export sector.

The report has a special section on Financial Sector Assessment, which summarizes the major findings of the recent Financial Sector Assessment Program. The report highlights a complex array of institutional and regulatory factors that are responsible for the weak performance of the financial sector. The government has announced a comprehensive reform program designed to address these problems faced. The FSA provides a broad set of policy recommendations that can be used to operationalize the government’s program. Source

New World Bank Report, Taking Stock, Shows Increase in Vietnamese Economic Growth

CFI

Recent Posts

When Trust Erodes: Unpacking the Anatomy of Corporate Scandals

Corporate scandals, from Wells Fargo’s fake accounts to Enron’s fraudulent accounting, shatter public trust and…

1 week ago

The Evolution of Elite: A History of Hedge Funds

From Alfred Winslow Jones’s 1949 experiment to today’s trillion-dollar hedge fund industry, the story of…

1 week ago

The Vanishing Vault: Has Digital Banking Closed More Than Just Branches?

As physical bank branches vanish from high streets across Europe and North America, the shift…

2 weeks ago

AI Dividends Arrive: Big Tech’s Earnings Surge Shows Power of Scale and Strategy

Meta, Microsoft, Apple, and Amazon deliver robust earnings, reinforcing their central role in markets—and highlighting…

3 weeks ago

Sango Capital: Reframing Africa’s Investment Landscape for a New Global Cycle

As global capital seeks diversified growth and risk-adjusted returns, Sango Capital reaffirms Africa’s position as…

1 month ago

The Janus-Faced Banker: Hjalmar Schacht and the Tragedy of German Economics

Hjalmar Schacht, a brilliant economist who rescued Germany from hyperinflation, ultimately became an enabler of…

1 month ago