Media Center

News Release

ADB Increased Viet Nam's 2009 Growth Projection but Noticed Growing Risks

HA NOI, VIET NAM (22 September 2009) – Due largely to swift and strong policy responses, Asian Development Bank (ADB) has revised up its GDP growth forecast for Viet Nam for 2009 (from 4.5% projected in March 2009 to 4.7%) and maintained the projected growth of 6.5% for 2010, in a major report released today. However, with the increasing fiscal deficit and inflationary pressure, as well as the deficit in balance of payments, the report underscored the need for the Government to strike a balance between stimulating growth through demand-side measures and safeguarding macroeconomic stability.

In launching the Asian Development Outlook Update 2009 (ADOU), updating the annual publication released in March/April every year that forecasts economic trends in Asia, ADB noted that Viet Nam's economy is weathering the global economic crisis relatively well. Despite the weak external environment, the economy has continued expanding this year, albeit at a slower rate because expansionary fiscal and monetary policies boosted consumption and domestically financed investment. Viet Nam's economic slowdown appears to have bottomed out early in 2009, with year-on-year GDP growth continues to quicken since the first quarter of the year. "We would like to congratulate the Government and the people of Viet Nam, because we can make this positive assessment as a result of the quick and strong policy measures the Government has taken in minimizing the adverse impact of the global economic downturn on Viet Nam," says Ayumi Konishi, ADB Country Director for Viet Nam.

However, as the signs of recovery can also been seen in some parts of the global economy, there are also growing concerns, particularly for Viet Nam. There are sings for the return of inflation which can be aggravated by higher global commodity prices reflecting the recovery of the global economy on one hand, and the rapid growth of money supply on the other. "We very much appreciate the fact that monetary authorities have already started to take measures to keep inflation in check, and to damp devaluation expectations. We understand the Government is fully aware of the growing risks," says Ayumi Konishi. In making projections for 2009 and 2010, the report assumes SBV will start tightening monetary policy toward the end of this year. It is further assumed that the Government will not take additional fiscal stimulus measures for the remaining of 2009 and 2010.

ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2008, it approved $10.5 billion of loans, $811.4 million of grant projects, and technical assistance amounting to $274.5 million.

Contacts