Can Van Luc, a senior official at the Bank for Investment and Development of Viet Nam, forecast that GDP growth next year would be 5.5-5.7 per cent and credit would surge 13-15 per cent while inflation remained stable at 7-7.5 per cent.— Photo baohaiquan

HA NOI (Biz Hub)— Experts suggested the Government continue to stabilise the macro economy and control inflation at a conference held yesterday by the State Bank of Viet Nam.

Can Van Luc, a senior official at the Bank for Investment and Development of Viet Nam, forecast that GDP growth next year would be 5.5-5.7 per cent and credit would surge 13-15 per cent while inflation remained stable at 7-7.5 per cent.

Such a forecast assumes that global economic growth will rebound significantly and local businesses will be ready to capitalise on participation in the Trans-Pacific Partnership and ASEAN Economic Community (AEC). Luc urged the Government to support firms so that they could do so.

Financial expert Le Xuan Nghia said that if measures were taken to deal with non-performing loans (NPL), lending next year would increase 14-15 per cent and economic growth would also be higher.

A representative from HSBC anticipated that GDP in 2014-15 would rise 5.4-5.8 per cent, higher than the forecast of 5.2 per cent for this year.

However, the bank expected inflation next year to increase 8.3-8.6 per cent, much higher than this year's forecast of 6.7 per cent.

HSBC anticipated that Viet Nam's foreign currency reserves would rise by US$5 billion yearly to reach $40 billion by 2015.

The forex rate would be stable at VND21,500 while the interest rate remained unchanged at 7 per cent.

Besides renovating the economic growth model, policy, infrastructure and human resources improvements should be also sped up, Luc said.

He added that the Government should do more to support businesses and deal with non-performing loans and cross-ownership in the banking sector.

He also suggested the Government raise the cap for foreign investors in the financial and banking sector.

Economist VuDinh Anh recommended that the Government not loosen monetary policies as this would negatively impact inflation control and economic stability.

The central bank should target roughly 10 per cent credit growth next year, rather than 13-15 per cent, he said.

Instead of further cutting the deposit interest rate, the economist said authorities and banks could take measures to reduce the gap between deposit and lending interest rates.

Echoing Anh, Nguyen Dac Hung from Banking magazine said that the credit growth target should be considered only as a reference, rather than a hard line that the banking sector had to reach at any cost.

Hung also recommended that the central bank continue its current stable forex policy, allowing the forex to fluctuate by only 2-2.5 per cent in 2014-15.

In order to support businesses, Nguyen Thi Ngoc Ha from the National Committee on Financial Supervision recommended speeding up tax administrative renovation and suggested a VAT reduction for a number of necessary industries. — VNS