The Hong Kong Shanghai Banking Corporation (HSBC) Global Research has released their report on Vietnam's macro-economic outlook which claims Vietnam's economic growth this year could reach 5%.
Prices of many goods have been on the rise
According to the report released on October 2, Vietnam has achieved certain goals in stabilising the macro-economy. "An economic downturn could be a chance to find out weaknesses and remove the shortcomings from a complicated market where state-own enterprises have been working inefficiently," the report stated.
However, the GDP growth is still low. The country’s September headline CPI increased 6.48% against last September. Core inflation in August and September also increased 8.8% and 11.2% compared to the same period last year.
Meanwhile, food prices in September decreased to 1.8% , down from 2% in August.
Though Vietnam still has to take precautions with an increase in both the headline and core inflation rate, HSBC said price rises in gas, electricity and health care services increased due to administrative measures.
"This could help to cover the budget deficit and stabilise market prices." the report said.
The fact that the Purchasing Managers' Index (PMI) has increased over the last three months despite low domestic and global demand due to the economic downturn is a positive sign.
HSBC recorded a comeback in many key export products such as textiles, rice, coffee and crude oil. Vietnam’s trade deficit in 2012 could reach 2.3% of GDP and Vietnam may contain its headline inflation rate to single digits.
