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HSBC confident in Vietnam’s economic growth
UK-based HongKong and Shanghai Corporation Limited (HSBC) has predicted that Vietnam’s economy will see positive growth in 2011.
The Financial Times quoted a report by HSBC’s economist Sherman Chan as saying that Vietnamese legislators have got back on to the right track after seeing years of fast but unsustainable development lead to runaway inflation, trade deficit and weakening domestic currency.
According to Chan, the Government’s recent measures such as devaluing the Vietnam dong, increasing the interest rates for inter-bank loans, and reducing the credit growth and public spending show its determination to stabilize the national economy, and ensure its sustainable growth.
However, Chan said, the double-digit inflation rate, high import surplus, pressure on the devaluation of the Vietnam dong, low foreign currency reserves, budget deficit, and inefficient operation of state-owned enterprises are challenges facing the 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 its payment of 20 percent interest rates on loans and public spending reduction, said Chan.
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