Vietnam among most 'vulnerable' rapid-growth markets: Ernst & Young study

TN News

Email Print

Global accounting firm Ernst & Young has listed Vietnam among the eight rapid-growth markets with the most potential vulnerability, but is hopeful of a sustained economic recovery from next year.

The firm said in its Rapid-Growth Markets Forecast, which studied 25 fast-growing economies, that the country faces the most risk with regard to public debt -- especially foreign debt -- inflation, growth of credit markets, and foreign reserves.

The risk of "currency change over year" is at medium level while "current account" faces the least risk.

Indonesia is in the same group, while Malaysia is in the middle, and Thailand is in the group of rapid-growth economies with least exposure to risk.

Vietnam's subdued export markets and persistent high real-interest rates will keep this year's economic growth at around 5 percent.

But there will be a sustained pickup from next year when a strong increase in foreign direct investment begins to boost exports, the UK-based firm said.

The study expected economic growth to be 5.2 percent next year and exceed 6 percent in 2015 and 7 percent two years later.

Though the trade deficit will widen again from 2012, a "generally balanced" current account and rising FDI will keep the dong steady.

Better trade access and strong remittances will also support medium-term growth and keep inflation under control.

Thus, there would be more monetary easing from 2014 with further policy rate cuts to boost credit growth, the study said.

But the state-owned sector would maintain preferential access to credit, it added.

Like us on Facebook and scroll down to share your comment

More Business News