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HSBC: Vietnam's economy is better transformation

WEDnesday - 19/02/2014 13:55
HSBC: Vietnam's economy is better transformation

HSBC: Vietnam's economy is better transformation

In reporting macroeconomic outlook by HSBC Vietnam Vietnam announced on 4-11 shows , although the index rose more slowly but surely , Vietnam 's economy is increasingly more positive changes .
Expected growth of 5.2 % .

As announced , the purchasing managers manufacturing ( PMI ) of Vietnam in October at 51.5 points - still holding above the threshold of 50 points in two consecutive months . Output, new orders , employment and labor quantity purchased has increased . Lower input prices reflect inflation decelerated from 6.3 % in September to 5.9 % in October . The worst thing about a stagnant economy seems to have been overcome , in the short -term growth is still low due to domestic demand remaining sluggish .

Growth in 2013 is the expectation of 5.2 % . This growth 's better than 5 % was recorded in the first half but not much excitement . At the same time , although hopefully the recovery will continue in 2014, but in 2014 growth rate may only increase slightly by 5.4 % . The decline is a serious reality show bad debt crisis in Vietnam's desire to reduce consumption and investment attractiveness .

However, if you look beyond the numbers , there are reasons that people can be optimistic about the future prospects of Vietnam . The policy makers have understood the necessity of reform . Vietnam has a lot of potential , especially as the country possesses a young population and force continuously increased with the number of 90 million people .

GDP per capita is about $ 1,700 lower for Vietnam also saw many opportunities to increase income . This is not an easy problem . The key to success is the need to put surplus labor force has not been trained workforce in rural areas become sources of labor productivity is higher.

The government push to attract foreign direct capital ( FDI ) , especially in manufacturing , is considered positive . From January to date, registered FDI inflows have increased 95.8 % over the same period last year, reaching U.S. $ 13.1 billion . FDI inflows into the manufacturing sector better , increased 136.5 % to $ 9.3 billion . This helps to increase labor demand and promote investment and exports - the elements necessary to offset domestic demand situation stagnated .

Shifting forward

Along with the rising demand , the manufacturer said input prices in October fell from 55.9 points in September to 55.1 points. This helps manufacturers increase the price for the first time since January 3.2013 to ease cost pressures . Input prices have dropped reflected in the CPI in October wholly Vietnam's down from 9.1 % in September compared with the same period last year to 8 % in October . Cause CPI decreased mostly due to transportation costs and lower education .

One of the risks to inflation in the coming months, perhaps derived from the increase in food prices that can be found in the index in October (up from 3.5 % in September compared with the same period last year to 4 , 1 % ) . HSBC said that food price inflation will rise slowly , especially between now and the end of the Lunar New Year . However, inflation pressures seem to be under control thanks to global commodity prices low , and thus helps to reduce shipping costs .

From the beginning of the year , credit growth has increased at only 6.6 % compared to the same period last year . This shows that the bad debt problem in Vietnam is still not fully resolved although Assets Management Company of Vietnam ( VAMC ) are efforts in the acquisition of bad loans from the banks . This result leads to the loan principal and affect the level of optimism of the private business sector
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