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Business sentiment runs high in Vietnam
Chief executives of domestic and foreign companies in Vietnam exuded an air of optimism last week when they discussed Vietnam’s future economic outlook.
At a business luncheon organized in HCMC last Friday by the British Business Group Vietnam (BBGV) and the European Chamber of Commerce in Vietnam (EuroCham), guest speakers conceded there remained woes but said growth momentum had emerged again.
Speaking to more than 150 business executives, Tom Tobin, CEO of HSBC Bank (Vietnam) Ltd., said growth drivers were in place now as reform and stimulus measures taken by the Government were starting to take effect.
Tobin said HSBC was expecting the country’s gross domestic product (GDP) to grow 7.2% this year, higher than projected by the Vietnamese Government. “So, we are quite optimistic.”
Prime Minister Nguyen Tan Dung told the 19th World Economic Forum on East Asia 2010 in HCMC earlier this month that the nation was looking to an economic expansion of 6.5% or above this year and an average of 7-8% in 2011-2020.
Ian Lydall, Senior Partner and General Director of PricewaterhouseCoopers, said the narrow difference of GDP growth forecasts by the Government and HSBC indicated more confidence in the country’s steady growth.
The Economic Intelligence Unit (EIU) in March 2009 put Vietnam’s economic growth for last year at a mere 0.3% while others had more positive projections. In the end, the country posted growth of over 5.3% last year though the global economy was still reeling from the crisis.
Projections for Vietnam’s GDP growth have changed this year. “The difference has been down in a range of from 0.5% to 1%. So, I think we got more confidence,” Lydall told the Daily after the luncheon.
Despite caution about forecasts given the remaining challenges, particularly in the Eurozone, Lydall said there were high hopes for Vietnam. “There are reasons to believe that something slightly above 7% is possible.”
On the same side, Tobin of HSBC said notwithstanding tough global conditions, Vietnam was now a middle-income country and continued growth was backed by the construction and stable services sectors, growing productivity and strong consumption demand.
“We’re looking at a kind of almost full recovering to where it was before… The Vietnam story I think is picking up again,” Tobin said. He added foreign direct investment (FDI) was still flowing into the country and new investors were arriving.
Lydall, who is also board member of BBGV, showed positive factors. “You can see this in terms of investment, additional investment made by the companies already here and new investments come again plus the attitude of business leaders.”
Lydall said many British firms were interested in the Vietnamese market and looking to expand their business. Retail is one of the sectors attractive to British companies and a number of retailers want to have their presence here.
Lydall, Tobin and other guest speakers named inflation and trade deficit as the major concerns for Vietnam. But, Chairperson and CEO of REE Corp. Nguyen Thi Mai Thanh said the Government had made serious efforts to control inflation while maintaining the momentum for economic growth.
Dominic Scriven, CEO of Dragon Capital, sent out a positive message about Vietnam in a statement released before he presented his view on the economic events, outlook and the stock market in Vietnam at the luncheon.
“Vietnam’s macro-economic concerns have eased so far this year; yet again pointing out the merits of non-correlation. Clearly this won’t be the case for ever, but for now, policymakers should be encouraged, and businesses motivated,” Scriven said.
Lydall noted many Vietnamese companies had been resilient through the economic downturn, turning in sound financial performances. “Whilst this varies between industry sectors there is every reason to believe that the outlook for the rest of 2010 is good.”
VietNamNet, SGT
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