Vietnam's economy unlikely to improve this year: IMF

Vietnam's economy unlikely to improve this year: IMF

HANOI (DPA): The International Monetary Fund (IMF) warned Vietnam on Thursday against implementing protectionist economic policies and said significant growth before year's end should not be expected.

"It is fair to expect that under the current circumstances, under current policies, 1999 is unlikely to be any better than 1998," said IMF Vietnam director Eric Offerdal.

Vietnam was wrong to assume it would ride high through Asia's ongoing economic crisis and come out relatively unscathed, Offerdal told a Hanoi international business luncheon.

"There is widespread recognition that Vietnam has not been sheltered," he said, and called on the communist nation to speed up financial sector reform and employ greater transparency.

Government figures put 1998 GDP growth at 5.8 per cent, a marked drop from the 9 per cent growth of the mid-1990s. Most international economists put the 1998 rate at closer to 4 per cent and expect even less growth this year.

Offerdal's statements follow the IMF's acknowledgement Wednesday it had "badly misgauged" the severity of the Asian economic downturn, in a 147-page report on the fund's rescue bailouts in Indonesia, South Korea, and Thailand.

Vietnam and the IMF have been at a virtual standstill over the past 18 months, with the fund refusing to dole out the third tranche of a 540 million dollar loan through its Enhancement Strategic Adjustment Facility because of a lack of reform commitment by Hanoi.

Offerdal admitted that "the transition to a new set of economic policies is a torturous process".

Vietnam sent signals to the IMF late last year that greater economic reforms were on track and that it was ready to sit down with the IMF for discussions on reinstituting the suspended loans.

Sources said the two sides are likely to meet after Tet, the lunar new year celebrated in Vietnam in February.