Light trucks assembled by Vinaxuki Co. Experts are calling on the state to implement a stable long-term policy on foreign exchange rates in order to boost domestic production. — VNA/VNS Photo Ngoc Ha

At a workshop on releasing the Vietnam Annual Economic Report 2014 on Thursday in Ha Noi, a representative of the VEPR stated that following the success of the previous reports, this year's report, titled "The Constraints to Growth," aims at exploring and reducing the constraints of Viet Nam's long-term economic growth. Those constraints require Viet Nam to have a strong focus on reforming the economy, renovating the economic growth model and figuring out a general socioeconomic model for Viet Nam in the future.

According to experts of the report, the country will continue to face challenges during the reformation process of its economy, including weakness of enterprises and not strong enough policies. Especially, this year, dispute between Viet Nam and China on East Sea will threaten economic relations between the two countries.

The VEPR noted that Viet Nam has imported material, equipment, machine and building services of energy and infrastructure constructions and also has exported various key agricultural products such as rubber, rice and fruits. Therefore, the dispute will have negative effects on their economic relations.

Under the report, experts expect Viet Nam's GDP growth to reduce to 4.15 per cent for low rate and to 4.88 per cent for high rate this year.

Meanwhile, the report estimates the national inflation to reduce to between 4.76 per cent and 5.51 per cent this year.

It pointed out that issues of Viet Nam's short and medium terms include choice of giving priority for policies on recovering economic growth and enterprise or for suitable monetary policies and control of macroeconomic stabilisation.

According to the experts, the government should not prolong the period of using credit package to rescue the domestic property market to avoid wrong expectations from the market.

The state should have a stable policy on foreign exchange rates for long term in the future to have positive effects in domestic production, they noted.

They added that in the current situation, Viet Nam should define economic and strategic partners to build long-term cooperation, including Japan, South Korea, Australia, India and ASEAN countries. Meanwhile, the country should reduce dependency on China in the trade sector.

Additionally, the state should create more favourable conditions for attracting more investment to the agricultural sector and developing sea economy.

The Viet Nam Annual Economic Report has been conducted since 2009. Its research results have been published as a series of annual reports in order to summarise major economic issues in the previous year, provide an economic outlook for the coming year and provide policy recommendations.

The report is a key product of Viet Nam National University's Strategic Research Programme called "Economic Theories and Macroeconomic Policy in the condition of International Economic Integration of Viet Nam."

The report is also part of the package of Independent Economic Assessments funded by the Australian Government's Department of Foreign Affairs and Trade for the period 2014–16.

"Support for the Annual Economic Report is one part of our broader partnership with the Government of Viet Nam and Vietnamese institutions to strengthen the enabling environment for economic growth," stated Ms Nadia Krivetz, Charge D'affaires, Australian Embassy in Ha Noi.

"Australia's support is designed to help the nation manage the challenges associated with the transition to a market economy and to avoid the problems faced by other countries that have fallen into a middle income trap." — VNS