In its latest report on Vietnam ’s macro-economy and marketpotential for June, HSBC said this is one of many major initiativeslaunched by the Government to improve the efficacy of the banking systemled by Decision 254.
Meanwhile, the CentralCommittee, the Party’s decision-making body, appointed two new Politburomembers and a new Finance Minister. These appointments signal thepolitical leadership’s readiness to tackle serious reforms in Vietnamby appointing experienced and capable technocrats.
The report states that domestic economic activity continues to behammered by weak domestic demand. Much of Vietnams ’ recent economicmalaise can be traced to the State’s unfettered credit binge in the pastdecade and an underdeveloped financial sector that has been saddledwith bad debts.
Softness in year-to-date exportscontinues, with a 15.1 percent growth year-on-year. While theyear-to-date figure remains in double digits. Vietnamese shipmentshave suffered from weak global commodity prices. Manufactured goods, onthe other hand, have rebounded, bolstered by stronger demand and newinvestment in the textile and garment, footwear and electronics sectors.
With subdued consumption and reduced reliance onforeign energy, Vietnam ’s year-to-date deficit improvedslightly, now at 1.9 billion USD. Strong remittance inflows and reducedimport costs are likely to keep afloat Vietnam ’s current account in2013, creating a healthier macro-economic environment.
HSBC also expects core inflation to drop significantly in the comingmonths thanks to a favourable base effect and sluggish demand.Rising domestic energy production capacity should also help stabiliseVietnam ’s future energy supply.
The report forecast that Vietnam’s gross domestic product will hit 5.1 percent this year.-VNA
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