Viet Nam
Economic Outlook
May 2012
Dominic Mellor, expanse Economist
Outline
1. touch on of Resolution 11
2. Economic Prospects and Risks
3. Key messages
1
Part 1
Impact of Resolution 11
Confronted at start of 2011 with
macroeconomic instability …
largeness and Credit egression
(Year-on-year, %, Q1 2007- Q1 2011)
Inflation (y-o-y, end of the quarter) (rhs)
Growth of credit to the rescue (lhs)
Credit growth
Inflation
70
30
60
25
50
20
40
15
30
10
20
5
10
0
0
Q1 Q2
2007
Q3
Q4
Q1
08
Q2
Q3
Q4
Q1
09
Q2
Q3
Q4
Q1
10
Q2
Q3
Q4
Q1
11
reference work: General Statistics Office and State rim of Viet Nam
2
… Government introduced Resolution 11
Main monetary and fiscal targets
Indicators
2010 Actual
2011 Target
fiscal Deficit (% of GDP)
5.6%
5%
Credit Growth (y-o-y %)
32.4%
20%
M2 Growth (y-o-y, %)
33.3%
15-16%
N.
A
16%
Discourage lending as % of total
Source: Ministry of finance and State wedge of Viet Nam
Fiscal deficit has been reduced …
Revenue, spending and Fiscal Balance
(Annual, % of GDP, 2007-2011)
31
Revenue and grants
30
On-budget expenditure
29
28
27
26
25
24
2007
2008
2009
2010e
2011e
2007
2008
2009
2010e
2011e
0
-1
-2
-3
-4
-5
Fiscal balance on Governments Definition
-6
Source: Ministry of Finance
3
… and credit growth has slowed …
Credit growth (year-on-year) and lending rate, Q1, 2007 Q4, 2011
give the sack Credit Increase
%
Credit Growth
Trillion VND
70
250
60
200
50
40
150
30
100
20
50
10
0
0
Source: State Bank of Viet Nam
… as SBV tightened monetary policy…
Interest rate, (per annum, %), Jan. 2010 April 2012
% per annum
Refinancing rate
20
Discount rate
Repo drift for 7 days
16
12
8
4
Sources: State Bank...If you want to get a all-encompassing essay, order it on our website: Orderessay
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