Foreign investors optimistic on Vietnam’s 2014 outlook

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Hanoi at nightA conference intended to provoke recommendations for the economic and monetary policies for the 2014 – 2015 period in Hanoi on November 18 heard opposite opinions from local and foreign experts on the possibility of recovery of the Vietnamese economy.

While many Vietnamese hold a pessimistic view on the country’s economy in 2014, those from outside the country have a much brighter outlook, said Sumit Dutta, CEO of HSBC Vietnam, at the event held by the State Bank of Vietnam and Lao Dong newspaper.

The grounds for this comment, Dutta said, are the fact that Vietnam has a strong economic base with a young population, high literacy rate, rapid poverty reduction rate, fast urbanization pace, and low currency depreciation rate.

However, economic expert Vu Dinh Anh said there are still no positive signs that suggest the economy will improve in the next two years.

“The likelihood that the overspending rate will be increased to 5.3 percent GDP and the country will continue to issue domestic and international bonds will not help improve the economy in 2014 and 2015,” he said.

Anh also said while the fiscal policy of Vietnam in the next two years will remain loose, there will be macro-economic instabilities should the monetary policy also be loosened.

Cao Si Kiem, chairman of the Association for Small- and Medium-sized Businesses, said it is a tough challenge for Vietnam to meet its credit growth target this year.

Credit growth in the year to October is recorded at 7.8 per cent, which means the growth in the last two months must be more than 4 per cent in order to meet the 12 percent target, Kiem said.

Kiem described the current situation as a paradox, with banks having surplus capital but the inability to offer loans to businesses that are suffering capital shortage over fear of bad debts.

“Hence, it’s very difficult to achieve the 4 per cent credit growth,” he said. warning that “If the issue of nonperforming loan remains unsolved, we can never discuss economy or business recovery.”

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Reading Time: 2 minutes

A conference intended to provoke recommendations for the economic and monetary policies for the 2014 – 2015 period in Hanoi on November 18 heard opposite opinions from local and foreign experts on the possibility of recovery of the Vietnamese economy.

Reading Time: 2 minutes

Hanoi at nightA conference intended to provoke recommendations for the economic and monetary policies for the 2014 – 2015 period in Hanoi on November 18 heard opposite opinions from local and foreign experts on the possibility of recovery of the Vietnamese economy.

While many Vietnamese hold a pessimistic view on the country’s economy in 2014, those from outside the country have a much brighter outlook, said Sumit Dutta, CEO of HSBC Vietnam, at the event held by the State Bank of Vietnam and Lao Dong newspaper.

The grounds for this comment, Dutta said, are the fact that Vietnam has a strong economic base with a young population, high literacy rate, rapid poverty reduction rate, fast urbanization pace, and low currency depreciation rate.

However, economic expert Vu Dinh Anh said there are still no positive signs that suggest the economy will improve in the next two years.

“The likelihood that the overspending rate will be increased to 5.3 percent GDP and the country will continue to issue domestic and international bonds will not help improve the economy in 2014 and 2015,” he said.

Anh also said while the fiscal policy of Vietnam in the next two years will remain loose, there will be macro-economic instabilities should the monetary policy also be loosened.

Cao Si Kiem, chairman of the Association for Small- and Medium-sized Businesses, said it is a tough challenge for Vietnam to meet its credit growth target this year.

Credit growth in the year to October is recorded at 7.8 per cent, which means the growth in the last two months must be more than 4 per cent in order to meet the 12 percent target, Kiem said.

Kiem described the current situation as a paradox, with banks having surplus capital but the inability to offer loans to businesses that are suffering capital shortage over fear of bad debts.

“Hence, it’s very difficult to achieve the 4 per cent credit growth,” he said. warning that “If the issue of nonperforming loan remains unsolved, we can never discuss economy or business recovery.”

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