SARS, Iraq will not derail Vietnam's growth: WB

SARS, Iraq will not derail Vietnam's growth: WB

Agence France-Presse, Hanoi

The short-term shocks of SARS and the Iraq conflict will not
knock Vietnam's economic growth potential significantly off track
this year, the World Bank said on Monday.

"Although the worst fears related to the war in Iraq did not
materialize, there is still uncertainty about the economic
implications of Severe Acute Respiratory Syndrome (SARS), said
Klaus Rohland, its director in Vietnam.

"However, Vietnam has fundamental strengths that should enable
the country to withstand these short-term shocks and keep its
growth and poverty reduction efforts on track."

The World Bank, which is forecasting gross domestic product
(GDP) growth in Vietnam of around seven percent this year, said
the devastation caused by SARS on the country's once shining
tourism industry could shave up to 0.5 percent of this figure.

"Whether this estimate materializes depends very much on
whether Vietnam being the first country to contain SARS will help
change public perceptions," it said in a statement.

On Monday, the health ministry declared that it has brought an
outbreak of SARS in Vietnam under control after 20 days with no
new infections, becoming the first country in the world affected
by the deadly virus to have done so.

Ratings agency Standard and Poor's, in a compilation of
analyst forecasts, has warned the deadly disease could trim
between 0.1 and 0.5 percent from Vietnam's GDP growth this year.

"Our basic scenario is that SARS will have an impact on one
financial quarter," said Takahira Ogawa, director of its Asia-
Pacific sovereign ratings.

Economists say the growth rate could be revised further
downwards if there is another outbreak of SARS in the Southeast
Asian nation.

Meanwhile, the Asian Development Bank has forecast that
Vietnamese exports will increase by 9.1 percent in 2003 and by
8.4 percent in 2004, mainly in response to the U.S.-Vietnam
bilateral trade agreement which came into effect in December
2001.

But the bank warned in its regional outlook report for 2003
published on Monday that the war in Iraq could have a negative
impact on Vietnamese rice and tea exports because the now ousted
regime was a significant importer last year.

"Any fall in these two exports will have a direct bearing on
the poorer sections of the population," it said.