Experts forecast a 5.8 per cent growth rate for Viet Nam next year. — VNA/VNS Photo Huy Hung

HA NOI (VNS) – Viet Nam should maintain sustainable growth as the economy will face numerous difficulties and challenges in spite of recent recovery.

This was the consensus of experts at a conference held here yesterday on "Economic 2014 Review and 2015 Prospects."

Sanjay Kalra, the International Monetary Fund resident representative in Viet Nam and Laos, told the conference that global GDP this year would reach 3.3 per cent, a 0.4 per cent decrease over the figure reported last April.

Kalra said the forecast was lower than expected because difficulties arising from the global economic crisis remained, along with unpredictable changes in the financial market.

The IMF representative also forecast global GDP next year to reach 3.8 per cent. For Viet Nam, he noted that in the past two years, the economy has seen positive and sustainable change in spite of instability, and investors' confidence has risen.

But Kalra suggested that Viet Nam continue maintaining stable macro-economic growth and restructuring.

"The country's economic growth and macro-economic stability has shown remarkable improvement. However, risks have been huge as debt has been a concern while business effectiveness of State-owned enterprises stirred challenges for Viet Nam's financial year," he added.

He said the banking sector should also be restructured and merged to ensure a system that was strong enough to improve bad debts. The economy needed reforms to improve output and quality, he added.

Barry Weisblatt, head of VPBank Securities' Analysis Department, said most of Viet Nam's key sectors, including agriculture, industry and services, showed growth prospects while the real estate market showed signs of recovery.

Nguyen Duc Vinh, general director of VPBank, said business and finance directors as well as banks mapped out plans for 2015.

A report from the bank showed that Viet Nam has remained in the difficult situation of having to choose between achieving a high growth rate or maintaining sustainability.

If the Government chose a high growth rate, the country's public debt would be higher. If the Government maintained current sustainability, annual GDP growth will be less than six per cent and lead to record inflation.

However, the currency will remain unchanged and securities growth will remain at 20 per cent per year.

The Government will have to reduce public debt through State-owned enterprises' restructuring to divest from ineffective businesses while promoting private investment and commerce.

"If the Government chooses the second plan, the lending interest rate will be at a low level next year, leading to higher profits for businesses. The lending costs will also be reduced, thereby contributing to credit growth," the report said.

The bank also said that regardless of which plan the Government choose, share prices would rise in the first half of next year.

However, Tran Dinh Thien, head of the Central Institute for Economic Management (CIEM), believes that difficulties lie ahead for the economy.

"The economy's recovery remains faint, as domestic enterprises were weaker than foreign ones," Thien said, adding that the Government should provide solutions that make domestic businesses stronger.

He suggested that the country renew its growth model and mechanism, as well as craft and implement policies encouraging the development of domestic companies.

Nguyen Mai, chairman of the Viet Nam Association of Foreign Invested Enterprises, expressed the same view, saying that the first task should be to review public debts. The country should take measures to help small and medium enterprises gain access to capital for production.

"If the Government resolves the issues of capital and public debts, the country's growth in 2015 will be higher," Mai added.

Vo Tri Thanh, CIEM deputy head, noted that the economy has shown positive and negative signs.

"However, Viet Nam should focus on maintaining sustainable growth instead of fast development," Thanh said, and predicted the country's growth rate next year to reach 5.8 per cent. — VNS