Xinhua, Ho Chi Minh City :
Vietnam has remained relatively robust amidst the turmoil in international financial markets, Hong Kong and Shanghai Banking Corporation (HSBC) has said in its February “Vietnam at a Glance” report.
Local Vietnam News daily on Friday quoted the report as saying that having a relatively small capital market is perhaps one reason and deriving limited benefit from the so-called quantitative easing in the developed world is likely another.
While some emerging markets are grappling with a hangover from their over-reliance on cheap money for growth, Vietnam was forced to come down from its own high credit growth rates in 2011.
The report made a note that the Vietnamese government took measures to tighten monetary and fiscal policy to cool an overheating economy, improve management of the financial system starting with classification of banks and purchasing bad debts, and reassess growth bottlenecks.
Domestic demand decelerated significantly, bringing down import costs and lifting the trade balance into surplus. Inflation has stayed in single digits since May 2012. The exchange rate, once a laggard, has steadied.
While hope is running high about its potential, especially in the international investment community, the report said the economy is still fragile, with major bottlenecks largely unaddressed.
The 5.4 percent growth in 2013 was primarily driven by the services sector and steady inflows of foreign investment into the manufacturing sector. The impressive registered and disbursed foreign direct investment (FDI) growth rates in 2013, 81.7 and 9.9 percent respectively, reflect the country’s labor and geographical competitiveness.
But domestic firms, especially small and medium-sized enterprises, are suffering from tough credit conditions, lackluster domestic demand, and declining competitiveness. This means policymakers will have to address issues hindering domestic firms’ performance to sustain growth in the medium and long terms.
In the short term, the economy should continue to be supported by gradual improvement in institutional capacity building and a focus on inflows of investment into manufacturing, the report suggested, adding that with the worst likely over, policymakers can now work out a concrete strategy to increase economic efficiency and realize its potential.
The report also highlighted noticeable rebound that the country is experiencing, including heating-up manufacturing activity and the sharp rise in the output index to 53.5 from 52.6 reflecting rising demand for Vietnamese goods.
Vietnam has remained relatively robust amidst the turmoil in international financial markets, Hong Kong and Shanghai Banking Corporation (HSBC) has said in its February “Vietnam at a Glance” report.
Local Vietnam News daily on Friday quoted the report as saying that having a relatively small capital market is perhaps one reason and deriving limited benefit from the so-called quantitative easing in the developed world is likely another.
While some emerging markets are grappling with a hangover from their over-reliance on cheap money for growth, Vietnam was forced to come down from its own high credit growth rates in 2011.
The report made a note that the Vietnamese government took measures to tighten monetary and fiscal policy to cool an overheating economy, improve management of the financial system starting with classification of banks and purchasing bad debts, and reassess growth bottlenecks.
Domestic demand decelerated significantly, bringing down import costs and lifting the trade balance into surplus. Inflation has stayed in single digits since May 2012. The exchange rate, once a laggard, has steadied.
While hope is running high about its potential, especially in the international investment community, the report said the economy is still fragile, with major bottlenecks largely unaddressed.
The 5.4 percent growth in 2013 was primarily driven by the services sector and steady inflows of foreign investment into the manufacturing sector. The impressive registered and disbursed foreign direct investment (FDI) growth rates in 2013, 81.7 and 9.9 percent respectively, reflect the country’s labor and geographical competitiveness.
But domestic firms, especially small and medium-sized enterprises, are suffering from tough credit conditions, lackluster domestic demand, and declining competitiveness. This means policymakers will have to address issues hindering domestic firms’ performance to sustain growth in the medium and long terms.
In the short term, the economy should continue to be supported by gradual improvement in institutional capacity building and a focus on inflows of investment into manufacturing, the report suggested, adding that with the worst likely over, policymakers can now work out a concrete strategy to increase economic efficiency and realize its potential.
The report also highlighted noticeable rebound that the country is experiencing, including heating-up manufacturing activity and the sharp rise in the output index to 53.5 from 52.6 reflecting rising demand for Vietnamese goods.
