Unknown whether economy is stabilising, says S&P

Vietnam’s economic stability depends on the government’s ability in controlling the credit growth momentum, Kim Eng Tan, a specialist from Standard & Poor’s in Singapore said

It’s too early to say whether Vietnam’s economic situation has improved because it also depends on the ability to fulfil the commitment of administrators, S&P stated.

In 2011, the country’s credit growth target lowered from 23 percent to 20 percent and the government required further tightening monetary policy due to raging inflation with price spikes in electricity and fuel.

The State Bank of Vietnam (SBV), the country’s central bank, also raised the refinancing rate, rediscount rate and the compulsory reserve ratio.

Tan said “It’s too early to say if Vietnam’s economic situation is gradually stabilising and even progressing. This depends on whether policy makers’ commitments are carried out satisfactorily.”

Vietnam’s March inflation was 13.98 percent, marking a 25-month high meanwhile the trade gap climbed to $1.15 billion from $1.11 billion in February.

The country’s consumer price index (CPI) saw sharpest rise in the region together with prolonged trade deficit, causing bad impacts on Vietnam’s financial stability. – DVT

Tags: Vietnam economic, Vietnam economic growth, Vietnam economy, Vietnam economy 2011