(MENAFNEditorial)
Core Views
* The Communist Party of Vietnam (CPV)'s 12th National Congress which will convene in January 2016 will maintain current pro-growth economic policies but eschew political liberalisation. One of the CPV's biggest challenges will be cracking down on corruption. Meanwhile the emergence of a new generation of CPV officials could lead to rifts with the old guard over the pace of reform leading to policy confusion.
* We expect continued strong foreign direct investment (FDI) healthy export growth and ongoing efforts by the government to improve macroeconomic fundamentals to keep the Vietnamese economy growing strongly in 2015. Consequently we forecast Vietnam's real GDP growth to accelerate to 6.4% in 2015 from 6.0% in 2014.
* We expect the State Bank of Vietnam (SBV) to devalue the Vietnamese dong by another 1.0% in 2015 owing to a strengthening US dollar. As such we see the unit averaging VND21469/USD in 2015 down from VND21003/USD previously. That said the country's positive economic growth outlook and improving external position should provide structural support for the unit keeping it largely stable over the coming years.
* While the Vietnamese economy has been strong falling inflation and below-target credit growth will spur further interest rate cuts by the State Bank of Vietnam (SBV). We maintain our forecast for the SBV to cut its benchmark interest rate by a total of 50 basis points (bps) to 6.00% in 2015.
* While the Vietnamese government continues with its budgetary reform the recent minimum public sector wage hike will slow fiscal improvement. We forecast Vietnam's budget deficit as a share of GDP to come in at 4.1% in 2015 up from our previous forecast of 2.9% and marking only a minor improvement from the 4.4% in 2014.
Full Report Details at
- http://www.fastmr.com/prod/1003965_vietnam_country_risk_report.aspx?afid=101
Key Risks To Outlook
* The potential for renewed maritime dispute with China poses downside risks to our 2015 real GDP growth forecast of 6.4%.
* Should the US economic recovery hit a standstill this...
Report Table of Contents:
Executive Summary
Core Views
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Risk Of Renewed Maritime Tensions Remains
TABLE: Political Overview
Long-Term Political Outlook
Key Political Challenges Over The Coming Decade
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Activity
Expecting Sustained Growth Momentum In 2015
TABLE: Eco nomic Activit y
Fiscal Policy
Gradual Fiscal Recovery Amid Positive Growth Outlook
TABLE: Fiscal Policy
Monetary Policy
Rate Cuts In 2015 To Spur Further Yield Compression
TABLE: Moneta ry Polic y
External Position To See A Gradual Improvement
TABLE: Current Account
Chapter 3: 10-Year Forecast
The Vietnamese Economy to 2023
2014-2023: A New Focus On Quality Growth
TABLE: Long-Term Mac roeco nomic Forecasts
Chapter 4: Operational Risk
Operational Risk Index
Operational Risk
TABLE: Operational Risk
Transport Network
TABLE: Asia-Transport Network Risk
Economic Openness
TABLE: Asia -Eco nomic Ope nness
TABLE: Top 5 Products Impo rted (USDmn)
TABLE: Top 5 Trade Partners Product Expo rts (USDmn)
Chapter 5: Key Sectors
Infrastructure
TABLE: Construction & Infrastructure Industry Data
table: Construction & Infrastructure Industry Data
Oil & Gas
TABLE: Oil Production
TABLE: Oil Production
TABLE: Gas Production
TABLE: Gas Production
Other Key Sectors
Table: Food & Drink Sector Key Indicators
Table: Autos Sector Key Indicators
Table: Defence & Security Sector Key Indicators
Table : Pha rma Sector Key Indicators
Table : Telecoms Sector Key Indicators
Table : Freight Key Indicators
Chapter 6: BMI Global Assumptions
Global Outlook
Reality Check: Uncertainty Reigns
Table : Global Assumptions
Table : Developed States Real GDP Growth %
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS %
Table : Eme rging Markets Real GDP Growth %
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