National GDP to reach 7 per cent by 2015, accounting firm predicts

Thursday, Jul 25, 2013 14:50

EY predicted that commodity prices and currency movements remained sources of inflation risk for 2013 and next year.—Photo anninhthudo

HCM CITY (Biz Hub)– Viet Nam's Gross Domestic Product (GDP) will peak at over 7 per cent in 2015 as exports and investment improve as well as private consumption, according to accounting firm EY in its latest forecast on rapid-growth markets.

For this year, the company predicted that 2013 would be another year of 5-6 per cent growth, although monetary and fiscal restraints are slowly easing as inflation comes under control.

In its forecast, EY said spare capacity and slack demand continued to deter private investment. "Meanwhile, credit growth also remains constrained as banks continue to react to last year's increase in non-performing debt," the report said.

As a result, investment in state-owned companies and infrastructure projects has been affected. Moreover, the slow recovery of the EU and US markets will also limit export growth this year, reducing last year's current account surplus.

"The slippage into a deficit seen from 2015 will be minor and financed by capital inflows. However, it highlights the continued reliance on inward and domestic investment to attain the medium-term growth target of 7 per cent or more," EY said in its forecast.

In addition, price stability will be promoted in the medium-term by increased domestic energy and food production, better monetary management and greater stability of the Vietnamese dong, the report added.

However, EY predicted that commodity prices and currency movements remained sources of inflation risk for 2013 and next year.

As for rapid-growth markets, EY said investors have been reassessing risks, as recovery in global trade and investment have showed signs of faltering.

Due to challenges such as weak currencies, low interest rates and strong credit growth, such markets are expected to have a slower recovery, at about 4.6 per cent.

Over the medium-term, they will grow close to 6 per cent in the 2015-16 period. "Foreign direct investment flows are helping to diversify economies, allowing some rapid-growth markets to leap-frog technologies," the EY report said. — VNS

Comments (1)

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Thùy Trang - Monday, 01/06/2015, 15:39 Reply | Like