[governance-vn] ADB warns Vietnam of high growth rate target
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Thu Sep 18 06:07:22 EST 2008
Subject: [vnnews-l] FR-ADB: ADB warns Vietnam of high growth rate target
Date: Tue, 16 Sep 2008 23:15:52 -0700 (PDT)
sent to vnnews-l by Stephen Denney <sdenney at OCF.Berkeley.EDU>
ADB warns Vietnam of high growth rate target
The Associated Press
Tuesday, September 16, 2008
HANOI, Vietnam: Vietnam's high economic growth target could hurt the
country in the long term if it fails to clamp down on spiraling inflation,
the Asian Development Bank warned Tuesday.
The government aims to bring down surging inflation, which hit a 17-year
high of 28.3 percent in August, to single digits by the end of 2009. It
also has lowered its growth target to 7 percent this year from 8 percent.
"Our suggestion to the government of Vietnam is that it probably aims for
lower growth rate with lower inflation and lower trade deficit next year,"
said Ayumi Konishi, ADB country director for Vietnam told reporters.
"Then Vietnam will be able to aim at much higher growth in 2010," he said.
The ADB projects Vietnam's economic growth will slow. In its global
development outlook update, released Tuesday, it revised the growth target
for Vietnam this year down to 6.5 percent from 7 percent. In 2009, it
projects 6 percent growth, down from the previous estimate of 8.1 percent.
"If you look at historical lessons of many countries in controlling
inflation, stabilizing macro economy, actually you will almost never find
any country which has succeeded in controlling inflation and at the same
time promoting growth," Konishi said.
Konishi said Vietnam could achieve higher growth than projected by the
ADB, but they can achieve that with "the cost of higher inflation and
widening trade deficit."
The country's trade deficit continued to widen in the first eight months
of the year, reaching nearly US$16 billion - already more than the US$14.1
billion for all of 2007.
With the global economy slowing, "if Vietnam tries to go against that, you
will be inviting a very high inflation and then this time it will be more
difficult to control," Konishi said.
Copyright ) 2008 The International Herald Tribune | www.iht.com
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