Inflation is estimated to decline to one-digit ratio by the end of 2012, opening up chances for interest rate cut made by State Bank of Vietnam (SBV) who will intensify exchange rate in the face of declined import needs. Those are signals as analyzed by experts of HSBC regarding macroeconomic factors encouraging enterprises to promote production and business.As reported inflation has been eased to 17.3% creating high hope of more deduction to year’s end. Vietnam dong is stable after restructuring of banking system is facilitated; however, experts of HSBC assert that the situation is delightful while investors are careful. They anticipate of reduction in domestic needs and exportation in 2012. Eventhough interest rates are reduced in 2012, consumers and investors fall short in consumption whose growth is forecast to be reduced from 5.9% in 2011 to 5.7% in 2012.Experts confirm that challenges brought about by high rate of inflation remain to haunt the people and foreign investors in long term. They are more confident in Vietnam dong in 2012 thanks to tighten policies of SBV. As inflation is slowed down, managing policies of macroeconomy will be better in commercial and financial positions. It is expected that deficits will be stable at about USD 10.1 billion in 2012 while budget balance of the government will be down to 3.8% in 2012.The most encouraging of all is that Vietnam dong did not suffer over-depreciation. SBV has helped to retained to no higher than 1% of depreciation from September to the end of 2011. SBV mentioned presure of depreciation of Vietnam dong which was reduced in price by 8.5% in February 2011. In 2012, Vietnam dong will see gradual reduction which is expected to be at 3% not such sharp depreciation in 2011..HSBC experts see possibilities that SBV would tighten up foreign exchange and gold markets as parts of an effort to manage supply and demands.In the meantime, import and export values are, within expectation, reduced due to sluggish economic situations in USA, China, and economic downturn in the Europe.Enterprises of great import and export capacities may worry but after one year of disturbance, they are now more confident in signals of macroeconomic stability and reforms conducted by the government, breathing new life to restructuring and promoting production as well as business.Reported by Thanh Son – Translated by Vi Bao
Signals of macro-economic stabilization encourage enteprises to promote production and business
