Vietnam’s economy looks grim with ADB’s forecast

The government’s Resolution 11 released early this year is a timely response to the double-digit inflation, draining forex reserves and a devaluating local currency, said Tomoyuki Kimura, ADB’s country director in Vietnam.

Adb: policy tightening will lower inflation

In its Asian Development Outlook 2011 Update (ADO Update), the ADB said Resolution 11, a comprehensive policy package, has made good initial progress by helping the exchange rate to stabilise, allowing foreign reserves to be replenished, and lowering monthly inflation outcomes during June – August.

Tighter spending helps curb inflation

The report was launched by the Asian Development Bank (ADB) in Ha Noi yesterday. Bank country director for Viet Nam Tomoyuki Kimura said being faced with double-digit inflation, dwindling foreign reserves and a weakening currency, the Government’s Resolution 11, adopted in February this year, was a comprehensive policy package of fiscal and monetary tightening measures to curb inflation. Progress has been made but year-on-year inflation remained at more than 20 per cent, Kimura.

Expert predicts inflation at single-digit rate in 2012

Fiachra Mac Cana, managing director and head of research of the Hochiminh City Securities Co. (HSC), told a meeting with investors last Friday that 2012 inflation would be around 10 percent or so, as money supply has been choked off and the pressure on price increase has abated. The global growth is slowing down so there is no much pressure on prices, and furthermore, the credit growth and money supply growth have come down substantially this year, he said.

Inflation control remains top priority: PM Dung

The key task for the remaining months of the year to continue with a tightened monetary policy while allowing credit for production in order to achieve the goals of containing inflation and maintaining a rational growth of around 6 per cent.

Time not right to declare victory in fighting inflation

The government and the State Bank of Vietnam (SBV) are right to focus policy on reducing inflation and achieving stability for the value of dong. High interest rates have been a significant part of enforcing those policy aims. While the pace at which inflation is growing has slowed down, it would be viewed badly by the market if “victory” was declared too early and interest rates lowered before it is clear that inflation is on a downward trend. Once it is on a downtrend, there may be scope to reduce interest rates gradually.

Cautious rate rise on cards

The announcement dispels doubts that the government will ease monetary policy which could blow up already high inflation rates. “The government determines to cap the credit growth this year at 20 per cent and money supply growth at 16 per cent in accordance with Resolution 11,” said Vu Duc Dam, Government Office chairman.

Further fiscal & monetary tightening in coming months

The Vietnamese authorities deserve our applause for facing up to tough economic issues. Today’s rate hike was just another step in the long battle against inflation. Although the policy stance has clearly shifted from boosting growth to improving economic stability since February, the data flow remains challenging.

JICA stands by cooperation commitments with Vietnam

Mr Kiyoshi spoke highly of the Vietnamese Government’s efforts to stabilise the macro economy and control inflation and considered this an important foundation for JICA to maintain its ODA cooperation commitments to Vietnam.

Can Vietnam contain inflation and achieve development goals?

Kenichi Ohno, an economic expert from Japan, proposed a number of measures, including developing practical industrial and financial policies, to deal with inflation and maintain growth rate. However, this remains a challenge for Vietnam, which was still considered as a low middle income country in 2008, despite having abundant human resources and holding a strategic position in the region.

Large banks post robust profit

Currently, most of large banks in turn published their business results in Q1 with quite surprising figures amidst many hardships of the economy, highly surging inflation, tension on interest rate and forex rate, narrowed credit growth and tightened gold trading.

IMF cuts Vietnam’s inflation forecast to 9.5pct in 2011

According to IMF’s regional economic outlook, Vietnam has overcome the global crisis thanks to the substantial financial stimulus package worth 5 percent of its GDP and monetary easing policies. The IMF commented that Vietnam is of the fastest growing economies in Asia. In 2010, Vietnam posted a growth of 6.8 percent thanks to demand for both domestic and international growth. However, the expansion policy adopted during the crisis also has increased macroeconomic risks.

Hanoi-hosted ADB meeting focuses on inflation

Nguyen Van Giau, Governor of the State Bank of Vietnam, said at a press briefing prior to the meeting, the first ever hosted by Hanoi during its 45-year long membership, that so far this year Vietnam has devalued its currency to reduce demand in order to curb increasing inflationary trends.

Prices likely to climb another 2 percent in May

Inflation will continue to be high for the near future due to impacts of economic and policy factors on the domestic economy, including the deregulation of electricity rates (slated to begin fluctuating under free market rules in June) and a minimum wage increase in May, said former State Bank of Vietnam Governor Cao Sy Kiem. The current bout of high inflation was ignited when the Vietnam dong was devalued by 9.3 percent against the US dollar in February, followed by hikes in petrol costs and electricity rates in March. Inflation was also spreading globally, especially in Asia, exerting great pressure on the Vietnamese economy.

Domestic steel prices drop substantially

According to Nguyen Tien Nghi, Deputy Chairman of VSA, the main reason for the fall of domestic steel price is the cancellation of public investments and the halt of unnecessary projects. In addition, steel prices the world over have decreased and many investors have cut investments in construction in response to the Government’s policy to minimise inflation.

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