Standard Chartered: Vietnam Economy Recovering
Vietnam&rsquos economy is gathering a momentum to recover with trade deficit and inflation fore to fall, Standard Chartered Bank said in a new report on Vietnam.
The country will attain GDP growth of 6.4 per cent in the fourth quarter of 2008, bringing the full year economic growth to 6.7 per cent, the British bank fore.
Vietnam will see inflation rise 23 per cent at the of this year.
The VND/USD exchange rate is predicted to stand at between 17,000 and 17,500 in the fourth quarter and base interest rate at 18 per cent per annum.
Standard Chartered said the global prices of foods and oil will be key factors influencing Vietnam&rsquos inflation picture. Therefore, maintaining tight monetary policy will be the top priority in the action aga of Vietnam&rsquos central bank.
The tight monetary policy is also expected to lower demand of imports and the devaluation of Vietnam dong against the U.S dollar will help reduce trade deficit.
With net foreign currency reserves of US$20.7 billion, equivalent to 2.7-month import value, the devaluation of Vietnam dong cannot happen, the bank said.
Standard Chartered suggested that Vietnam should continue to implement the same policy to the worst period of trade deficit and inflation.
Vietnam&rsquos CPI in June escalated 26.9 per cent from one year ago and the six-month trade deficit hit US$16.9 billion, according to the General Statistics Office. (Banking Times)
Vietnamese
