1. Market Research
  2. > Aerospace and Defence Market Trends
  3. > Vietnam Business Forecast Report Q3 2014

Vietnam Business Forecast Report Q3 2014

  • May 2014
  • -
  • Business Monitor International
  • -
  • 48 pages

Core Views

Vietnam's political outlook is stable and we see room for substantial reform over the coming years, particularly with regard to the business environment. Moreover, Vietnam is increasingly opening up to the international community, which will be good for longer term development. That said, Vietnam has a poor record in terms of the protection of human rights and there continues to be a lack of freedom for the press and media. Latest GDP figures show that the Vietnamese economy grew by 5.0% year-on-year (y-o-y) in Q114, and we believe that our 2014 real GDP growth forecast of 5.9% remains in sight. We believe that increased macroeconomic stability, combined with pro-growth policies will help the economy accelerate from 2013 levels. Key downside risks to this view include a faster-than-anticipated slowdown in China as well as the stalling of the country's reform drive. Vietnam's external sector will remain stable over the coming years, as a combination of strong macroeconomic dynamics, the ongoing de-dollarisation of the economy and subdued inflationary pressures result in broad exchange rate stability. We highlight that strengthening trade dynamics, combined with rising foreign direct investment – on the back of significant improvements in the business environment – will continue to bolster the country's external accounts.

The State Bank of Vietnam eased monetary policy on March 17, cutting the refinancing rate by 50 basis points to 6.50%, but we forecast the SBV will remain on hold for the remainder of this year, notwithstanding downside risks. We forecast that Vietnam's fiscal deficit will narrow over the forecast period to less than 1% of GDP in 2018 from 4.7% in 2013. The improvement in the government's fiscal accounts will come on the back of both higher revenue growth as well as a more tempered expenditure outlook. That said, we see risks to these forecasts on the back of potential for the government to have to absorb liabilities from the banking sector.

Table Of Contents

Vietnam Business Forecast Report Q3 2014
Executive Summary . 5
Core Views 5
Chapter 1: Political Outlook 7
SWOT Analysis .. 7
BMI Political Risk Ratings .. 7
Domestic Politics . 8
Pushing Ahead With Reform, But Large Challenges Remain ..8
Vietnam's political outlook is stable and we see room for substantial reform over the coming years, particularly with regard to the
business environment. Moreover, Vietnam is increasingly opening up to the international community, which will be good for longer
term development. That said, Vietnam has a poor record in terms of the protection of human rights and there continues to be a lack of
freedom for the press and media.
table: Political Overview .8
Long-Term Political Outlook .. 10
Key Political Challenges Over The Coming Decade 10
Vietnam's biggest political question over the coming decade is whether one-party rule under the Communist Party of Vietnam (CPV) will
face growing calls for democratisation, as was the case in other major South East Asian countries. While our core scenario envisages
the CPV transforming itself into a technocratic administration, it faces major economic challenges which if mismanaged could lead to
widespread unrest.
Chapter 2: Economic Outlook . 13
SWOT Analysis 13
BMI Economic Risk Ratings 13
Economic Activity . 14
Economy Still On Track To Hit 2014 Growth Forecast of 5.9% .14
Latest GDP figures show that the Vietnamese economy grew by 5.0% y-o-y in Q114, and we believe that our 2014 real GDP growth
forecast of 5.9% remains in sight. We believe that increased macroeconomic stability, combined with pro-growth policies will help the
economy accelerate from 2013 levels. Key downside risks to this view include a faster-than-anticipated slowdown in China as well as
the stalling of the country's reform drive.
table: ECONOMIC ACTIVITY .14
table : FOREIGN DIRECT INVESTMENT BY COUNTRY OF ORIGIN (TOP FIVE) 15
Balance Of Payments .. 16
External Sector To Remain Stable ..16
Vietnam's external sector will remain stable over the coming years, as a combination of strong macroeconomic dynamics, the ongoing
de-dollarisation of the economy and subdued inflationary pressures result in broad exchange rate stability. Moreover, we highlight that
strengthening trade dynamics, combined with rising foreign direct investment - on the back of significant improvements in the business
environment - will continue to bolster the country's external accounts.
table: Current Account ..16
table : FOREIGN DIRECT INVESTMENT BY COUNTRY OF ORIGIN (TOP FIVE) 17
Monetary Policy .. 18
Downside Risks To Interest Rate Forecast 18
We forecast the State Bank of Vietnam (SBV) to maintain its benchmark interest rate on hold for the remainder of this year at 6.5%.
While inflation pressures continue to moderate, the economy continues to strengthen, reducing the need for further cuts.
table: Monetary Policy 18
Fiscal Policy .. 20
Fiscal Deficit To Be Slowly Reined In 20
We forecast that Vietnam's fiscal deficit will narrow over the fo recast period to less than 1% of GDP in 2018 from 4.7% in 2013. The
improvement in the government's fiscal accounts will come on the back of both higher revenue growth as well as a more tempered
expenditure outlook. That said, we see risks to these forecasts on the back of potential for the government to have to absorb
liabilities from the banking sector.
table: Fiscal Policy ..20
Chapter 3: 10-Year Forecast . 23
The Vietnamese Economy To 2023 23
A New Focus On Quality Growth .23
Vietnam's growth prospects over the next decade remain positive in our view, as reflected by our bullish forecasts for real GDP growth
to average 6.2% over 2014-2023. We foresee a more stable economic environment, with inflation averaging a benign 5.8% and a
relatively balanced current account through 2014, before witnessing a mild surplus averaging 1.9% of GDP from 2015-2023.
table: Long-Term Macroeconomic Forecasts .23
Chapter 4: Business Environment 27
SWOT Analysis 27
BMI Business Environment Risk Ratings .. 27
Business Environment Outlook 28
Institutions 28
TABLE: BMI Business And Operation Risk Ratings 28
TABLE: BMI Legal Framework Rating 29
Infrastructure 30
TABLE: Labour Force Quality ..31
Market Orientation . 32
TABLE: Asia Annual FDI Inflows ..32
TABLE: Trade And Investment Ratings ..34
Operational Risk . 35
Chapter 5: Key Sectors 37
Defence 37
table: Defence Expenditure 2010-2018 38
Freight Transport 41
Table: Road Freight, 2011-2018 .42
Table: Inland Waterway Freight, 2011-2018 43
Other Key Sectors . 45
table : Oil and Gas Sector Key Indicators 45
table : Pharma Sector Key Indicators ..45
table : Autos Sector Key Indicators ..45
table : Telecoms Sector Key Indicators .46
table : Food and Drink Sector Key Indicators .46
TABLE: Infrastructure Sector Key Indicators 46
Chapter 6: BMI Global Assumptions .. 47
Global Outlook . 47
Growth Increasingly Polarised ..47
Table: Global Assumptions ..47
Table: Developed States, Real GDP GrowtH, % 48
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, % .. 48
Table : Emerging Markets , Real GDP Growt h, % ..49

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Veronica

+1 718 514 2762

Purchase Reports From Reputable Market Research Publishers
Europe Defense Spends on CBRN: 2016 to 2024

Europe Defense Spends on CBRN: 2016 to 2024

  • $ 7 999
  • Industry report
  • August 2016
  • by Strategic Defence Intelligence (SDI)

Summary Strategic Defense Intelligence in its report "Europe Defense Spends on CBRN: 2016 to 2024" provides quantitative top-level view of projected spends on CBRN. According to Strategic Defense Intelligence, ...

Thermal Imaging Market by Component, Application, End User, and Region - Global Forecast to 2021

Thermal Imaging Market by Component, Application, End User, and Region - Global Forecast to 2021

  • $ 7 150
  • Industry report
  • September 2016
  • by MarketsandMarkets

“Decline in the prices of thermal cameras and surging demand for thermal cameras in smartphones and all commercial applications are driving the thermal imaging market” The global thermal imaging market ...

Middle East and North Africa Defense Spends on C4ISR Electronics and IT: 2016 to 2024

Middle East and North Africa Defense Spends on C4ISR Electronics and IT: 2016 to 2024

  • $ 7 499
  • Industry report
  • August 2016
  • by Strategic Defence Intelligence (SDI)

Summary Strategic Defense Intelligence in its report "Middle East and North Africa Defense Spends on C4ISR Electronics and IT: 2016 to 2024" provides quantitative top-level view of projected spends on ...


ref:plp2014

Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.