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World Bank: Vietnam’s economy becomes more stable

5/24/2012

 
World Bank: Vietnam’s economy becomes more stable
Posted: May 24, 2012

 – Vietnam ’s economy is gradually entering a more stable macroeconomic environment after a prolonged period of heightened turbulence, said a World Bank report.

At a press conference to announce the World Bank’s East Asia-Pacific Economic Update 2012 in Hanoi on May 23, the chief economic expert
 of the WB in Vietnam, Deepak Mishra said while Vietnam’s economy has started to stabilise, the significant tightening of macroeconomic policies, along with an uncertain global economic environment, are beginning to take a toll on economic growth.

The country’s real GDP growth decelerated from 6.8 percent in 2010 to 5.9 percent in 2011 and further to 4.0 percent in the first quarter of 2012, he said.

According to the report, tighter domestic policies in 2011 have dampened investment, particularly in infrastructure and real estate, and private consumption. Thanks to a combination of these measures and falling food prices, inflation declined to 10.5 percent year-on-year in April, 2012 from a peak of 23 percent in August, 2011.

Maintaining macroeconomic stability remains the Vietnamese Government’s priority. The country’s economic growth is expected to be around 5.7 percent, and year-end inflation is forecast to decline to below 10 percent in 2012.

In a move to shore up the economy, the State Bank of Vietnam reduced policy interest rates by 200 basis points in March and April from 15 to 13 percent, and announced further reductions of at least 100 basis points every quarter during 2012, the report said.

Cooling demand and slow credit growth should dampen the inflationary impact of the rate cuts, which at the same time should help ease financing costs for the private sector.

The report also said that Vietnam ’s public debt is likely to remain sustainable if economic recovery continues and authorities remain on the current path of fiscal consolidation.

Deepak Mishra pointed out that Vietnam ’s near-term policy challenge is to maintain macroeconomic stability and restore confidence among investors, while addressing longer-term structural reforms.

He noted that the Government is stepping up efforts to restructure small and medium-sized enterprises (SME), public investment management and the financial sector.

A number of key regulations, including those involving medium-term investment planning, management and supervision of State capital investment in SOE, and performance monitoring of SOE are likely to be enacted during 2012.

Even if only a subset of the announced structural reforms is implemented steadfastly, Vietnam should return to a more sustainable macroeconomic environment while laying the foundations for greater efficiency and productivity to drive medium and long-term growth, he said.

The WB report also indicated that growth remains strong in developing East Asia and Pacific, recording 8.2 percent in 2011, although it has slowed from its post-crisis peaks.

In 2012, East Asia will remain the strongest performing region, even though its annual growth will further moderate as a result of a continued weak external environment.

The region is projected to grow by 7.6 percent this year, with slower expansion in China pulling down much of the regional aggregate.

Tom
5/24/2012 03:16:14 am

does this mean that the dong is going to r/v soon? How does this effect thar status?
Thank you.

bob
5/24/2012 04:03:28 am

thank you for reporting the news and not some can happen any
hour bullshit

justwantsomemoney
5/24/2012 06:58:18 pm

So this means what in English?

Spunky-T
5/24/2012 11:59:35 pm

What?? Just go ahead and RV already!:) !:)

Guru Dong
5/25/2012 07:38:50 am

Guru Dong
5/25/2012 07:40:30 am

This is more likely to happen when they find that Elvis is still alive and Michael Jackson did indeed fake his death.

big long dong
5/25/2012 02:54:32 pm

obviously everyone that has been bringing intel for all these past years have either been lied to or are lying and get a rise of gossip in this whole thing. it has created nothing but drive people crazy and get their hopes up every week by week month by month and probably year by year. best thing for everyone to do
1. stop spreading rumors
2. enough drama
3. every intel provider/newshound take your own advice on what you beleive as well with others and keep it to yourself instead of hearing one thing, say a different thing.
4. stop being greedy and buy dong or dinar once a week, im sure you will end up just fine
5.dont bug the banks, dont annoy the intel/newshounds

maybe if there was complete silence and if everyone could just chill out live your life, dont check the sites every 5 minutes and let this thing happen, maybe just maybe...it would


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