Economists say Vietnam’s economy still insecure, getting worse
01-10-2012 13:00:01+07:00
Economists say Vietnam’s economy still insecure, getting worse
The risks in the banking system have been increasing, the investors’ confidence has been decreasing. These factors show that Vietnam’s economy is still in insecurity.
Tran Dinh Thien, Head of the Vietnam Economics Institute said at the 2012 autumn economic forum held some days ago in Vung Tau City that the happenings so far this year shows the economic downhill and big difficulties.
The decline can be seen not only in the figure about the GDP growth slowdown, the number of bankrupted businesses, but also in the erosion of the people’s confidence and the increase in the systematic risk indexes.
The story of high inflation and uncertainty has been repeatedly occurring in the last few years. And what Vietnam needs to do now is to find out the differences in the conditions between 2012 and previous years and have another new approaching way to settle the problems. If not, the inflation and insecurity would still hang out.
The instability of the national economy can be seen in the ups and downs of the inflation index. Thien said it would be better not to refer to the targets about the local GDP growth rates, because these are just the “virtual” figures, while in fact, businesses are meeting serious difficulties.
One should look at the figures about the orders businesses have received to give forecasts about the economic prospect in the last months of the year and 2013. Meanwhile, a survey by HSBC showed that the number of orders placed so far with Vietnamese businesses remains modest.
The figure about the bad debt of 202 trillion dong, the unsold real estate products worth 70 trillion dong have also been cited as the big problems of the national economies. Stressing the necessity to deal with the real estate inventories, which Thien calls a “blood clot” in the national economy. Thien said that it would take at least seven years to settle the problem.
Mentioning the economic prospect in 2013, Thien said that there is no foundation to hope for a high economic growth rate in the year, while there still exists negative factors. However, he thinks that the opportunities for economic recovery would be seen in the year, while the targeted GDP growth rate should be set up at 4-4.5 percent.
Nguyen Duc Kien, former National Assembly’s Deputy Chair, agreed with Thien that the effort to slash inflation quickly may lead to some to bad consequences, while calling on to analyze the consequences in order to set up reasonable macroeconomic management measures.
Optimistic or pessimistic about Vietnam’s economy?
Moody's has downgraded Vietnam's credit rating, citing weaknesses in its banks and a stuttering economy. The downgrade to B2 from B1 for government bonds issued in local or foreign currency means the country would face higher borrowing costs if it sells new bonds, according to AP.
Meanwhile, Standard & Poor’s seemed to keep a little bit different viewpoint about Vietnam’s economy, when in its report released on September 26, gave positive assessments about the economy.
The rating agency revised its Banking Industry Country Risk Assessment (BICRA) on Vietnam from 10 to 9, or ‘very high risk' to ‘high risk'. The agency has also upgraded the ranking for three Vietnamese commercial banks.
S&P said the adjustment showed that the institution can see the decrease in the risks to the macroeconomic stability and finance in Vietnam.
Two months ago, Deputy Prime Minister Nguyen Xuan Phuc said before the National Assembly that the biggest difficulties were over, and that the GDP growth rate may reach 6 percent this year, while the inflation rate would be 7-8 percent.
vietnamnet
