VietnamNewsToday.com

Moody’s: negative outlook on Vietnam reflects uncertainty

Moody’s Investors Service Inc. said Wednesday its negative outlook on Vietnam reflects balance of payments uncertainty, with any change contingent on recent tightening measures arresting inflationary pressures and containing the volatile exchange rate.

The ratings agency also warned, however, that the rating could face further downward pressure if there was continuing erosion of the Southeast Asian nation’s foreign-exchange reserves—estimated at $12.2 billion at the end of 2010, compared with a peak of $25.8 billion in February 2008.

Moody’s in December downgraded its rating on Vietnamese government debt to B1 from Ba3 because of the threat of a balance of payments crisis, depreciation pressure on the dong, and rising inflation.

In a report released Wednesday, it said the country has struggled to balance growth desires with macroeconomic stability, adding that “policy accommodation over the past few years has directly contributed to overheating pressures, which have in turn led to high inflation and deterioration in the external payments position.”

The Vietnamese government has recently reversed its long-standing policy focusing on growth, unveiling a series of measures to combat major imbalances in the economy, which have been highlighted by increasing price pressures. Consumer prices rose 13.89% in March from a year earlier, the fastest on-year pace since February 2009, and far higher than the government’s target of capping inflation at 7% this year.

The government has said it will tighten monetary and fiscal policies, such as by trimming public investment and the budget deficit, boosting domestic production and rebalancing trade. Its credit-growth target will also be lowered, while the State Bank of Vietnam has raised its key interest rates several times in recent months.

At the same time, the government has also announced potentially inflation-stoking policies such as sharp increases in electricity and fuel prices, along with a spike in wages.

“It remains unclear whether the barrage of tightening measures after the Vietnamese new year represents a permanent departure from the previous policy framework, or whether this is merely an extended episode of “stop-and-go” policy making that has exacerbated the imbalances in the economy,” Moody’s said.

From WSJ

Newer Articles
  • 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
Older Articles
  • Asia’s $1 trillion infrastructure opportunity
  • Policies aim to slow growth, control inflation
  • Product piracy damaging economy
  • Premier Oil fields in Indonesia, Vietnam to begin output soon
  • Vietnam shocks could put damper on foreign investment
  • Vietnam’s credit growth above 5pct in Q1
  • Economic recessions always leave aftershocks on consumers: expert
  • Vietnam’s real GDP growth may reach 6.3 pct: American magazine
  • Vietnam hikes key rates in inflation fight, more moves seen
  • Vietnam Dong edges up in black market, steady at banks – Feb 28
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