ANZ: Vietnam GDP Forecast to Grow 5 per cent This Year

The Australia and New Zealand (ANZ) Banking Group has just released a monthly report on emerging Asian economies and has cut GDP growth outlook of Vietnam to 5 per cent this year.

 

“Vietnam will fare better than most emerging Asian economies in 2009 given its week links to the global financial system and its domestically-led growth,” ANZ said in its report.

 

ANZ noted the declines in investment and exports may be stabilizing. Exports dropped 3.7 per cent on year in the first two months, rice shipments doubled while oil shipments fell by more than 40 per cent. It has reported the trade surplus thanks to drastic decrease in imports by 42.3 per cent.

 

Registered FDI plunged to a record low [to US$185 million in January] while disbursed FDI was down 21 per cent on year.

 

Inflation was down sharply to 14.8 per cent on year in February, half of the level of 2008.

 

Local authorities are trying to dampen speculation about a further devaluation in the dong to shore up investor confidence.

 

Vietnam continues to ease its monetary policy by lowering mandatory reserve ratio to 3 per cent from 5 per cent this month, subsidizing 4 per cent interest rate via banks to all sectors to spur credit growth.

 

VN-Index fell by nearly 20 per cent last month as risk appetite waned. (ANZ Mar Report)