Vietnam Advised to Prepare Measures for Economic Recovery

Vietnam should have measures to prepare for economic recovery including further benchmark interest rate cuts, state tight control over the real estate market, maybe further devaluing the dong to boost exports, and encouraging state-owned corporations to buy goods for reserves at low prices now, Dang Viet Phuong, a stock analyst of PetroVietnam Securities proposed.

 

“Prices of goods dropped 50 per cent to 70 per cent compared with the peak of 2008, buying goods for reserves are essential now,” Phuong said.

 

“Demand for petro, steel, coal…will rise fast after the global economy will recover,” Phuong noted.

 

As for imports of Chinese goods, Phuong proposed that fights against contraband and smugglings must be beefed up; if not, Vietnam will absolutely help stimulate consumption demand in China, Phuong said.

 

According to the World Bank, Vietnam’s current account deficit last year was estimated at 13 per cent of its GDP value.

 

Also according to a survey by the Ban Viet Securities referring to crises between 1887 and 2008, each economic recession takes an average of 14 to 17 months, The U.S. sub-prime mortgage crisis triggered in early 2007 and this economy officially announced falling into recession in Sept last year, meaning that the U.S. economy will begin to bounce back by the end of third quarter this year, Phuong noted. (Securities Investment)