A report released by the Hong Kong-Shanghai Banking Corp (HSBC) stated that the Vietnamese government made a tough but right decision to prioritize macro-economic stability before growth.
In a recently published report ‘Vietnam at a glance’, HSBC stated that Vietnam appears to be a completely different country in 2012 compared to 2011.
This can be seen through the YTD trade balance surplus of US$14 million, while 2011 deficit was $9.8 billion; also inflation has slowed to a single digit, while in 2011 it was 18.6 percent; and the Vietnam dong has appreciated slightly against the dollar, by 0.8 percent, while in 2011 it depreciated 7.9 percent.
Although the country has now 5.0 percent GDP growth, lower than 5.9 percent in 2011, the government’s tough decision has brought about a change.
In the report released in November, price discounting strategy has supported sales, pushing HSBC PMI above 50, despite weak external demand. Easing food prices and containing transportation costs kept inflation manageable at 7.1 percent in November.