World Bank Reviews Economic Outlook of Vietnam
There is no doubt that Vietnam, like many other East Asian and Pacific countries, is facing difficult times with the current global slowdown. Vietnam’s growing openness to world markets has left it more vulnerable to plunging commodity prices, declining global trade, and tightening of capital markets. The latest East Asia and Pacific Update by the World Bank, however, paints a picture of hope for the region and more specifically Vietnam.
Bad News: Vietnam suffered from two major shocks
- Late 2007 – Massive capital inflows led to inflation, price bubbles, and a trade deficit
- Late 2008 – Worldwide economic slowdown with tightening of credit markets, decrease in world trade, plunge in prices
Good News: Impact of the world’s financial crisis was minimal to Vietnam
- Vietnamese banks are not exposed to the “toxic” assets
- Vietnamese abroad sending money to families in Vietnam might be able to keep the economy afloat in 2009 ($16 billion in 2008)
- Trade deficit (export > import) may improve with imports declining more rapidly than the decrease in exports
- Authorities announced a stimulus package to the poor
Visit the World Bank’s website to see the report in details.