Thursday, July 9, 2009

Vietnam economy on the rise

Photo: Chuck Kuhn Photography

Vietnam has “weathered the crisis astonishingly well so far,” HSBC Holdings Plc. said in a research note Wednesday. A rebound in construction and manufacturing is now driving the economy, it said.

The economy is forecast to experience a “big bounce” in growth to 6.8 percent in 2010 from 4.7 percent this year, the bank said.

“The recovery has begun,” Prakriti Sofat, a Singapore-based economist at HSBC, said in Wednesday’s note. “Things will continue to improve from here on, given the impact of the massive policy easing, the bulk of which was delivered in the later part of 2008, and improvement in global growth outlook.”

The State Bank of Vietnam cut its benchmark lending rate to 7 percent in February from 14 percent in October 2008. The key interest rate may be maintained at its current level until the third quarter of 2010, according to HSBC.

Vietnam’s economy grew 4.5 percent in the second quarter from a year earlier, up from 3.1 percent in the previous three months, the statistics office said last week. For the first half, gross domestic product expanded 3.9 percent.

Exports fell 10 percent to US$27.6 billion in the first six months, but in May and June exports grew 3.2 and 6.5 percent month-on-month, figures from the Ministry of Planning and Investment showed.

“The economic picture during the first half proved that the government’s stimulus measures began to take effect,” the research team of Ho Chi Minh City-based Saigon Securities Inc. wrote in a report dated July 6.

“The loosened monetary policies together with the interest-rate subsidy program played an important role in helping the economy through the most difficult times,” the team said. It forecast the economy could expand by up to 4.9 percent this year.

The economy is improving, Prime Minister Nguyen Tan Dung said in a statement posted late Tuesday on the government’s website that called for topping a 5 percent growth target that had been revised down earlier this year from an initial goal of 6.5 percent.

Stimulus measures



more info-->>Vietnam latest news - Thanh Nien Daily
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