Standard Chartered Revises 2008 Vietnam GDP Growth to 6.7 per cent, Inflation to 23 per cent

Standard Chartered in its recent report has revised its forecasts about Vietnam’s GDP growth rate to 6.7 per cent and inflation of up to 23 per cent this year, the Vietnam Economic Times newspaper said on June 6.

 

With the widening trade deficit hitting US$14.4 billion between January and May, Standard Chartered forecast the ASEAN country’s trade deficit may account for 25 per cent-30 per cent of GDP, even rocket to US$30 billion by the end of this year given its imports do not shrink.

 

Greenback sourced from the FDI, ODA and overseas remittances the country rely mainly on is estimated to total US$20 billion-US$25 billion this year, and cannot offset the hefty trade deficit, Standard Chartered highlighted.

 

Therefore, the Vietnam dong is under great pressure to depreciate more and cannot be improved until the country’s trade deficit is narrowed.

 

The foreign bank also predicted the Vietnam dong/U.S. dollar rate will be VND16,400/US$1 in the second quarter, VND16,700/US$1 in the third quarter and VND17,000 in the fourth quarter this year.

 

The dong/U.S. dollar rate will drop back to VND16,800 in the first quarter and VND16,600 in the send quarter next year, the bank predicted.

 

The government of Vietnam has recently cut the country’s GDP growth rate to 7 per cent from 8.5 per cent-9 per cent with inflation to jump 22 per cent this year. (Vietnam Economic Times)