The Vietnamese economy is expected to grow at a moderate pace of 5.4% in 2014 as its macroeconomic stabilisation performance continued to improve, said the World Bank in a report released on July 8.
Vietnam can grow at a faster pace if structural reforms are accelerated.
However this growth rate is below potential, said Victoria Kwakwa, the World Bank’s country director for Vietnam, adding that Vietnam's growth will not exceed 5.5% before 2016. The World Bank noted that Vietnam’s growth is mainly helped by stable foreign direct investment flows and strong manufacturing exports, while slow reforms in State-owned enterprises and the banking sector remained a drag on growth. Kwakwa said Vietnam’s long-term growth will depend on whether it can enhance economic efficiency and competitiveness by addressing those structural problems. The General Statistics Office reported last week that Vietnam's economic growth quickened in the second quarter of 2014, growing by 5.25% compared with the revised 5.09% expansion rate in the January to March quarter. The Vietnamese Government set a growth target of 5.8% for the whole of 2014. In its latest report, the World Bank noted that Vietnam has achieved some success in inclusive growth, as the average income of the 40% poorest grew by 9% annually between 1993 and 2012, exceeding the 7% of the remaining 60%. However, World Bank economist Gabriel Demombynes, pointed out that concerns over inequality are growing, especially among urban residents who are more aware of differences in living standards. The World Bank stated that rising concerns about inequality require the Government to focus on further removal of barriers to equality of opportunity when formulating socio-economic development policies. Nhan Dan Online
