The national economy would begin to stabilise early next year, Deputy Prime Minister Nguyen Sinh Hung said at the business roundtable discussion with Government officials yesterday.

Hung expressed confidence in the nation's recovery and said the Government would try its best to reach this year's economic targets.

"You are here at a difficult time for Viet Nam, caused by the global economic slowdown," Hung told the conference." Since the middle of last year, the national economy has seen a slowdown and the economic growth rate has been static since the last months of last year, even though last year saw the GDP growth at 6.3 per cent over 2007."

For these reasons, the Government has focused its efforts from curbing inflation to the economic downturn, he said. Overall measures had been set to limit the impact of the crisis by further investing in infrastructure and construction, boosting production capacity for exports and ensuring overall social stability.

Since the beginning of this year, particularly throughout February, the national economy had shown positive signs, as all economic statistics were better than in January.

The Deputy PM hoped a new, albeit modest, growth rate would occur over the next few months.

This would show that measures taken by the Government and co-operation between domestic and foreign financial organisations, investors and businesses had started to take effect.

The Deputy PM said the economic situation would start getting better in the remaining months of this year and in 2010 Viet Nam would end its current five-year plan, though its industrialisation targets to the year 2020 would not change.

"We have tried our best to overcome the crisis and get back on track. This means looking for sufficient infrastructure, better investments and a proper legal environment, as well as qualified personnel to prepare for the year 2020," Hung said.

Internal strength would be a primary factor and international co-operation would be very important. Internal strength would attract more resources from abroad, he said.

The Deputy PM called for greater co-operation and assistance from foreign investors and international financial institutions during this difficult time.

HSBC chairman in Viet Nam Paul Leech told the conference: "Increased understanding between the Vietnamese Government and foreign investor community is, and will continue to be, a critical ingredient in the continued success of the economy here."

Nobody would be able to predict when the economic downturn would stop and recovery would begin, but all major world economies were trying to do away with global contractions, he said.

"We believe the medium and long-term outlook for Viet Nam remains a favourable place to put our shareholders' capital," Leech said. "We are also encouraged by Viet Nam's plans to meet the current challenges."

Christian Fredrikson, head of the Asia-Pacific region's Siemens-Nokia network, said he arrived in Viet Nam one year ago and things had certainly changed.

"Looking at Viet Nam, we feel that telecommunications is an absolute key in driving the social and economic growth and it is even more so in troubled times," Fredrikson said.

Asked during a break in the conference if Deputy Prime Minister Hung was over-optimistic about the future, acting head of the Viet Nam Economics Institute Tran Dinh Thien said he didn't think so.

"His evaluation about the impact of the world economic crisis and Viet Nam's weakness are reasonable," Thien said." He has emphasised key matters that the country must focus on to get out of the difficulties. His higher targets have their own basis and they call for greater efforts to be made. But his optimism here does not mean we just look at the sky clapping our hands."

Euro Cham Viet Nam director Thomas Felber said Viet Nam's response to the global economic downturn had so far been right in the sense that it moved quickly on the stimuli that helped the private sector: lowering interest rates, interest rate subsidies and cutting taxes.

"But the medium-term response has to be on infrastructure, which is also where the bottlenecks for development are," he said.

"It is right to start with the stimulus package the way Viet Nam is going to start it. But the focus should be on critically important infrastructure - power, transport - while at the same time strengthening investment positives in Viet Nam because there are many weaknesses.

"Infrastructure is very important for future growth."

"Our forecast for 2009 is very pessimistic compared to a good year of Viet Nam, so we forecast almost 3 percentage points less than a good year, which is a very dramatic drop," said Martin Rama from the World Bank.

"While the forecast is still 5.5 per cent for 2009 we will revise it as new data comes in. There is a lot of uncertainty.

"The conference said sectors remained optimistic. Not all will do well but we expect some sectors will do well."

US ambassador in Viet Nam Michael Michalak said he hoped to see a much clearer picture in the middle of this year - whether it was gloomy or not.

(Source:Vietnam News)