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"Vietnam Business Forecast Report Q1 2014" Published

Recently published research from Business Monitor International, "Vietnam Business Forecast Report Q1 2014", is now available at Fast Market Research

 
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Boston, MA -- (SBWIRE) -- 12/23/2013 -- Evidence of improving macroeconomic fundamentals in Vietnam (especially with regards to the outlook for domestic demand) sug -gests to us the balance of risks to our real GDP growth forecast of 6.0% for 2014 is gradually tilting towards the upside. Strong data on foreign direct investment inflows, remittances, passenger car sales, and property market launches, suggests to us that domestic demand is on a nascent recovery, setting the stage for stronger 2014 growth.

The stability we have seen in the Vietnamese dong of late is closely in line with our long-held view that the government's aggressive stance to de-dollarise the economy and adopt a more balanced monetary policy framework will help to bolster confidence in the currency. We also expect improving current account dynamics that will help to support stability in the currency.

We are encouraged by the government's recent moves to liberalise fuel and electricity price controls, and we see potential for more ag -gressive reforms to help bring the fiscal accounts back into balance much earlier than investors are anticipating. We forecast the budget deficit to narrow from 5.0% of GDP in 2013 to 4.8% in 2014.

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Major Forecast changes

We have slightly revised down our average 2014 headline consumer price inflation forecast from 6.8% to 6.3% to reflect recent data indicating benign inflationary pressures.

Key risks to outlook

Downside Growth risks From rising commodity prices: Should commodity prices witness a strong rebound in 2014, we could see the central bank adopting a more hawkish stance on monetary policy. The risk of having to hike interest rates aggressively would present significant downside risks to economic growth.

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