SATURDAY, JANUARY 05, 2002
IMF calls on Vietnam to encourage private sector
REUTERS
SATURDAY, JANUARY 05, 2002 3:08:44 AM
WASHINGTON: Vietnam's economy has remained "robust" despite a slowing global economy, but the country should do more to encourage the private sector and foreign investments, the International Monetary Fund said Friday.
The IMF, which concluded its evaluation of Vietnam on November 21, said the country's economic management has been "broadly on track," and noted that growth was strong while inflation has remained subdued.
IMF directors "welcomed Vietnam's continued track record of sound macroeconomic management and progress in implementing key structural reforms, which have contributed to favorable economic performance under the government's reform program," the IMF said in a statement.
The IMF said it expected the economy to show growth around 4.75 per cent for 2001, with inflation below the official target of five per cent.
"Despite slowing exports, economic growth in 2001 is likely to remain relatively robust, with continuing low inflation and a strengthening of the external position. The recovery in investment, following the implementation of measures to promote private sector development and to open up the economy, is particularly encouraging."
But the IMF said that the country's budget situation remains fragile and "will require sustained efforts to improve revenue and expenditure performance."
The IMF officials also commended the authorities for "the recent bold decisions to liberalize trade," saying this "will help position Vietnam to benefit fully from a global upturn."
But the organization said as the country moves away from a state-controlled economy, it needs to take steps to encourage private investment, including from abroad.
The officials "encouraged further efforts to promote private sector activity and foreign direct investment, noting that increased job opportunities in the private sector will be critical to offset the needed rationalization of the state-owned economic sector."
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