IMF pegs Vietnam growth at 6 pct

While inflation has recently risen due to rising commodity prices and supply-chain disruptions, it remains well below the central bank’s ceiling given the economic slack and relatively stable food and administered prices, the IMF said in a report.

But the labor market recovery is sluggish as underemployment remains high.

Small and medium sized enterprises remain vulnerable, problem loans are rising, real estate and corporate bond market risks are elevated, and the pandemic exacerbated longstanding structural challenges, the report said.

The several risks to growth include a slowdown in China and geopolitical tensions, it said.

Borrowers’ vulnerability to rising interest rates, funding problems in the leveraged real estate sector or a sharp correction in real estate prices could amplify balance sheet vulnerabilities, it added.

Lender HSBC recently increased its Vietnam growth forecast for this year to 6.9 percent from 6.6 percent.

But it lowered the forecast for next year from 6.7 percent to 6.3 percent.

The government targets 6-6.5 percent growth this year.

Last year it was 2.6 percent.