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Title:
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Vietnam Country Risk Service - March 2011
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Category:
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Market Overview
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Source:
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The Economist Intelligence Unit Limited
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Sector:
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Company:
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Detail:
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Date:
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4/7/2011
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Pages:
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22
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Language:
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English
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File Type:
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Size:
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274 Kb
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Summary:
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The ruling CommunistParty of Vietnam will maintain a firm grip on power in the next five years, and, despite signs of factional splits between conservative hardliners and relative reformers, there is no prospect of any major internal instability. Policymakers will face stiffchallenges in the early part of the forecast period, in terms of the need to strike a balance between stimulating the economy through expansionary fiscal measures on the one hand and containing inflationary pressures on the other. Real GDP growth in Vietnam is expected to average 7.2% a year in 2011-15, underpinned by strong growth in consumption, investment and exports. However, this forecast is subject to downside risks. Consumer price inflation will accelerate to a rate of 14.3% in 2011, from 9% in 2010, before slowing to an average of 7.8% a year in 2012-15. Policymakers are likely to face an ongoing battle to keep the dong stable against the US dollar. The Economist Intelligence Unit forecasts that the dong will depreciate from D19,127:US$1 in 2010 to D23,873:US$1 in 2015. The current account will remain in deficit over the next five years, but capital and financial inflows (including official foreign borrowing) will increase from the low levels that they reached in 2009
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