Vietnam Economy Grows Far Stronger Than Expected: Citigroup
Vietnam’s fourth-quarter growth exceeded market expectations and its whole-year expansion was “far more resilient” than the rest of Asia with the exception of China, the Citigroup Inc. said January 5.
The Hanoi-based General Statistics Office showed that the country’s economy grew 6.9% on-year in the fourth quarter of 2009, up from a revised 6.04% in the third quarter, and expanded 5.32% for the full year
This marked a rebound after first-quarter expansion of 3.14%, the slowest on record.
Johanna Chua, the Hong Kong-based head of Asian economic research at Citigroup, asserted that Vietnam’s fourth-quarter economic growth was “much stronger than expected.” Citigroup earlier expected Vietnam’s full-year growth of 4.7%.
Chua said local construction industry which grew 11.4% on-year in 2009 in particular was supported by “strong monetary and fiscal stimulus".
Credit growth rose to 38% last year from 25% in 2008. Shipments of electronic products and garments are rebounding, and overall Vietnamese exports should benefit this year from a weaker exchange rate.
She also proposed that Vietnam’s central bank will need to increase its benchmark interest rate to 9% because of the strong fourth-quarter growth and accelerating inflation. The rate was raised to 8% from 7% as of Dec. 1.
In addition to base rate hike, Vietnam’s central bank may also abolish or revise a regulation that places a ceiling on how much interest lenders can charge borrowers, Chua added. (VNA)
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