HSBC confident in Vietnam’s economic growth

March 08, 2011 | 17:35

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The UK-based Hong Kong and Shanghai Banking Corporation Limited (HSBC) recently predicted that Vietnam’s economy would see positive growth this year.

The UK Financial Times quoted a report by an economist from HSBC, Sherman Chan as saying that Vietnam’s polity makers were headed in the right direction after the country’s economy saw years of fast but unsustainable development.

According to Sherman Chan, the Vietnamese Government’s recent measures, such as devaluing the Vietnam dong, increasing interest rates for inter-bank loans and reducing credit growth and public spending showed its determination to stabilise the national economy and ensure sustainable growth.

However, Chan said that the double-digit inflation rate, a high import surplus, pressure on the devaluation of the Vietnam dong, low foreign currency reserves, a budget deficit, and inefficient operation of state-owned enterprises are challenges faced by the country’s economy.

Even if the Government managed to deal with these problems, it still needs to continue with its effective measures as Vietnam is negatively affected by a 20 per cent interest rate on loans and the public spending reduction at the end of this year, said Chan.