VietnamNewsToday.com

Economy set to cool in 2011 after red hot 2010

Vietnam will look to spell out more stable economic growth in 2011 after the year of being heated by gold and US dollar prices.

Alan Pham, chief economist of VinaSecurities Joint Stock Company, said he expected the government would put more emphasis on stability and less on growth this year.

“We think monetary policy will be tight until the end of the second quarter and moderately ease in the third quarter,” Pham told a company workshop on the country’s 2011 prospects in Ho Chi Minh City.

He anticipated the central bank’s base rate would be 10 per cent in the first half of 2011 and grow to 11 per cent in the second half and be maintained for the rest of the year. “Thus, the interest rate for deposits would fluctuate among 11-12 per cent, resulting in that of lending standing within 14-15 per cent. The interbank exchange rate would be around VND20,500 by the year’s end 2011, versus VND19,500 at the end of 2010.”

“Gold hit a record high in 2010, up almost 45 per cent compared to the end of 2009. The highest-ever price was set at VND38.5 million per tael in November 2010. The significant gap between local versus global gold price spurred illegal imports of gold, pressuring the stability of the forex market during October-December 2010,” Pham said.

Vietnam ended 2010 with inflation hitting 11.75 per cent against the end of 2009. This is the result of a loosening in monetary policy in the year’s second half, especially in October-December. According to VinaSecurities, inflation would likely continue through the first quarter of 2011 due to high consumption during the seasonal festivities. Monetary policy should be tightened further now so as to have its effect felt starting in the second half.

“The country was downgraded by Fitch last June, and by Moody’s and S&P last December and the reasons were high inflation, unstable Vietnamese dong, weak international balance of payments and debt problem at state-owned enterprises. However, the government is trying to shift the macroeconomic ship to a controllable area in 2011. Estimated credit growth for this year would stand at 23 per cent instead of 27.6 per cent last year,” Pham said.

Tony Hsun, managing director for a close-end infrastructure fund listed on the London Stock Exchange’s AIM market, said: “The worst is over for Vietnam in 2011. The economy will be less uncertain and there will be more positive elements, especially the government’s pro-stability stance with estimated gross domestic product (GDP) target for whole year of 7.2-7.5 per cent.

“The stock market will be renewed with vigor and confidence as VN-Index is cheap versus region and bad macro news already priced in November 2010. P/E is 10x versus regional average 12x-16x.”

Regarding infrastructure, Hsun said that growth prospects would be mixed, depending on sub-sectors, seeing higher dividend yield at about 5 per cent versus overall market at 2-3 per cent. As interest rate would be likely to remain high, companies with high cash level and low leverage would be favoured, especially those in in energy and agriculture sectors.

“However, negative outlooks will be still seen for shipping sector due to slower than expected recovery, rising oil prices and rising US dollar interest rates,” he noted.

Marc Townsend, managing director of CBRE Vietnam, said: “Overall property investment remains dangerous for everyone’s health in 2011 until gold dips and buyers and/or speculators move to other directions.”

From VirVN

Newer Articles
  • EVNTelecom asks for government’s approval to sell 12pct stake for VTC
  • Vietnamese enterprises expanding into international markets
  • Ernst & Young Vietnam role to be examined
  • Vietnamese firms invest over $24.5b in foreign countries as of July-end
  • Vietnam Insurance Market: Keeping Double-digit Growth
  • Vietnam’s economy looks grim with ADB’s forecast
  • Fearing recession in EU, Vietnamese businesses try to seek new markets
  • Rise in bad bank debt exposes economy
  • Tighter spending helps curb inflation
  • Expert predicts inflation at single-digit rate in 2012
Older Articles
  • NA Standing Committee analyses ineffective gov’t bonds
  • MoF sets targets for fiscal year 2011
  • Credit hurdles to trip up foreign-backed projects
  • Vietnam’s financial company opens rep. office in Laos
  • Less optimistic, Vietnamese firms still upbeat in 2011
  • Vietnam’s knowledge economy index remains low despite rapid growth, experts
  • Pillars to lift national development higher
  • Vietnam gets raw end of the deal
  • Policies have key role in attracting investment
  • Jewellery trade makes strong rise despite high gold price
Latest News
  • Vietnamese software firms consider Japan as the major market
  • Despite problems, 2011 FDI spending equals 2010
  • EVNTelecom asks for government’s approval to sell 12pct stake for VTC
  • Vietnamese enterprises expanding into international markets
  • Ernst & Young Vietnam role to be examined
  • Vietnamese firms invest over $24.5b in foreign countries as of July-end
  • Vietnam Insurance Market: Keeping Double-digit Growth
  • Vietnam’s economy looks grim with ADB’s forecast
  • Ministry rejects import-export tax changes
  • Government okays anti-dumping suit against US
For Foreigners
  • Adb: policy tightening will lower inflation
  • HSBC, Barclays to advise Vietinbank’s planned overseas dollar bond sale
  • Vietnam govt to service debt for troubled cement projects
  • Calm heads prevail as the forex market to remain cool
  • Further fiscal & monetary tightening in coming months
  • IMF cuts Vietnam’s inflation forecast to 9.5pct in 2011
  • Vietnam’s dong has best week since 1997 after dollar rates curb
  • Vietnam tightens control over state-bank partnership
  • Foreign investors list problems in Vietnam
  • Foreign invested enterprises complain about customs procedures

BusinessTradeVietnamGovernmentFDIWorld economyVietnamese PartyEconomyEconomicMarketState managementPrime MinisterHCM cityHanoiHo Chi MinhCPIAsianWorldAmericaEuropeNguyen Tan DungHau GiangMekong DeltariceStandingMekongCambodiausajapanchinakoreaLai ChauHoa BinhHoi AnChu LaiQuang NamDa nangCan thoSon LaPower PlantMinistry of IndustryDung QuatOilSingaporeThailandMalaysiaIndonesiaLaosVietnameseFDI capitalinvestorsforeign investorNetherlandsUSservicetransportationinfrastructuretourismVNPostExpressSpainGoldTra fishexportcontractstouristMiddle AreaConstructionShipbuildingIndustryCompanyIndustrial ZonebudgetDong NaiBinh DuongVung TauTay NinhBinh PhuocTay NinhLong AnTien GiangUS investorshydropower plantQuang NinhNha TrangStock ExchangeHNXIndexcapitalAgricultureDong ThapAn GiangExport-Processing ZoneYen BaiLao CaiLai ChauDien BienSon LaHoa BinhPhu ThoHa GiangTuyen QuangBac KanLang SonCao BangmanufacturersAseanRussiadevelopmentAviationinflationHong KongAmericanChamber of CommerceSeafoodODAWBIMFFEDAsia-PacificAssociationcountriesEuropeanmarine economyThanh HoaNghe AnNam DinhHa TinhPhu LýVinh PhucBac NinhBac GiangHung YenHai DuongBinh ThuanBinh PhuocLam DongGia LaiKon tumQuang NgaiQuang BinhQuang TriNinh ThuanCa MauBac LieuSoc TrangTra VinhKien GiangVinh LongBen TreincomespoliciesLawassetsNatural GasBuildingstatisticsstrategyDa Latmineral exploitationprocessingindustrieselectricitywatersupplyEnterprisesforestryfisherycommunicationsreal estatetransportationCorruptionbauxiteSecuritiesInsuranceBankFinanceAccountgoodsTrade BalancecoffeeCoalfestivalHa NamNinh BinhHoa BinhUniversityArtsBooktravelVietnam VisaVisaPagodaCommitteePeople's CommitteeVinashincompaniesHoa PhatHSBCACBvietcombankvietinbank

Copyright 2010 © VietnamNewsToday.com 
Powered by: CIINS Design by: Webdesign.vn