Although hit hard by the global economic crisis, Vietnam's economic fundamentals have remained strong, said Victoria Kwakwa, the World Bank (WB) Country Directorin Vietnam, citing the newly-released official figures of Vietnamese economy for the first half of this year.
The 3.9 percent economic growth in the first six months this year was lower compared with previous years, but it is better than several other countries in the region, said Kwakwa in a recent interview with Xinhua.
In the first quarter, Vietnamese economy went up by 3.1 percent year-on-year, figures from the General Statistics Office of Vietnam showed. The growth climbed to 4.5 percent in the second quarter.
"It is a positive trend from the first quarter to the second quarter," said Kwakwa. "The improvement showed that the economy continues to strengthen and the signs of recovery are picking up."
Kwakwa said Vietnam also managed to curb inflation in the first half of this year. In June, consumer price index (CPI) went up 3.94 percent year-on-year, as compared with the peak of inflation spiral in August last year, which was 28.32 percent, highest in a decade. "The number has come down considerably," she said.
Vietnam was caught by major inflation wave last year and now the situation is improving. Figures also showed that in the first six months, the CPI went up 10.27 percent year-on-year, while CPI registered year-on-year growth of over 20 percent in the first half of 2008.
By analyzing the performance of the Vietnamese economy, Kwakwa concluded that fundamentals continued to be strong for the Vietnamese economy. She was confident that the foundations of the Vietnamese economy would continue to support the growth and good macro-economic performances.
Vietnamese economy impressed the world by an average of seven-percent growth in the past decade. But the economy has been hit hard by the global economic crisis since the second half of last year with both export market and capital market narrowed.
To boost growth, Vietnam implemented a series of measures to expand domestic investment and demand, including providing subsidized loans to companies, expanding investment in infrastructure construction, reducing tax and ensuring social security.
Kwakwa said these measures have helped Vietnam stimulate demandand generate growth.
The World Bank economist said as the economy is slowly rebounding, it is now important to ensure the balance between further stimulation and minimizing inflation risk.
"It is time to deal with some of the side effects coming with strengthening demand, which tend to be inflationary, "she said. The size and content of any additional stimulus package should also be carefully considered.
Despite these concerns, the World Bank economist is still optimistic about Vietnam's economy in the second half.
As construction and industry growth has strengthened impressively and agricultural performance has recovered, Kwakwa believed that the country's economic growth would be higher in the second half as compared with the first half./.