Vietnam more vulnerable to world slump than neighbors, HSBC says

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Vietnam's current-account deficit, low reserve coverage of short-term external debt and imports and high inflation make it more vulnerable to a global recession than four of its Southeast Asian neighbors, according to an HSBC Holdings Plc report e-mailed Monday.

The spillover risks through the trade and finance sectors in Vietnam are aggravated by large domestic and external imbalances, according to the report, which also evaluated the vulnerabilities of Indonesia, Malaysia, the Philippines and Thailand.

Vietnam, with "inflation sticky at uncomfortably high levels," also has little room to make policy adjustments, HSBC said.

Corporations in Vietnam and the Philippines have the highest debt-to-equity ratios among the group, with leverage higher than in previous recoveries, it said.

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