WB chief economic expert Deepak Mishra, at the press conference on Thursday prior to the Consultative Group’s mid-term meeting in Hanoi, said Vietnam had gained success in stabilizing the macro economy. These include easing inflation, narrowing the gap between official and black-market forex rates while foreign reserve was kept at import value for two and a half months.

However, Mishra refused to say whether and when Vietnam will be able to achieve the three targets.

“We cannot predict when Vietnam will meet the targets as it depends on the effects of the Government’s short-term measures in Resolution 11,” Mishra said.

The World Bank predicted Vietnam’s inflation would reach its peak at 22% in June before coming down to 15% later this year. The global lender also noted that there is no longer a huge difference between official and black-market forex rates.

Concerning foreign reserve, Mishra declined to give any comments as the lender failed to access confidential information of the Government. However, the bank expected the figure at over US$10 billion as of February this year, or the equivalent to six weeks’ import value.

The World Bank also predicted the worst scenario for Vietnam’s GDP (gross domestic product) growth rate at 6% this year.

“Macro uncertainties of Vietnam were triggered by domestic matters, not by outside factors,” Mishra commented. The domestic causes include fast credit growth and liquidity, late winding down of the economic stimulus package, Vietnam dong devaluation, fuel price hikes and Vinashin’s hefty debts.

“Macro economic uncertainties repeat over and over, fading out confidence in the Government’s economic management. This is a vicious circle,” Mishra added.

Mishra said Vietnam in the future should pay attention to the banking system and a number of banks should be merged to ensure credit capability.

The World Bank-chaired mid-year Consultative Group meeting of Vietnam donors is set for next Thursday in Ha Tinh Province to focus on stabilizing the macro-economy and protecting the poor from economic instability.

The Government in February issued Resolution 11 regarding key measures to curb inflation, stabilize the macro economy and ensure social welfare. The resolution initially has proved effective in the management of money, credit, interest rates, exchange rates, foreign currencies and gold, which are gradually becoming stable.

Source: Saigon Times.