International analysts are more optimistic about a Vietnamese recovery than their local counterparts, the HSBC chief said at a conference held November 18 by the central bank to discuss economic solutions.
General director Sumit Dutta said foreign analysts are optimistic
because of factors like the large youthful population, rapid
urbanization, and strong currency.
The launch of the state-owned VAMC to clean up bad debts was a good move in the current situation, he added.
His bank has forecast GDP growth of 5.2 percent this year and 5.4 percent in 2014.
But economist Vu Dinh Anh said he saw no signs of a turnaround in the next two years.
He feared the economy would not revive given the higher budget deficit cap of 5.3 percent of GDP for next year from 4.8 percent this year and further debt issuances by the government.
If monetary policy is also loosened to go along with the loosened fiscal policy, it would hiy economic stability, he warned.
Cao Si Kiem, chairman of the Vietnam Association of Small and Medium Enterprises, pointed out businesses’ difficulty in accessing credit due to concerns over bank bad debts, which the State Bank of Vietnam estimated at 4.64 percent as of August end.
A recovery for businesses and the economy is unlikely until the country resolves the bad-debt problem, he said.
Credit growth was 7.8 percent in the first 10 months, and Kiem expected it to be “extremely difficult” for banks to meet the year’s target of 12 percent.
Truong Van Phuoc, deputy chairman of the National Financial Supervisory Commission, said credit growth of 10 percent would be good enough.
Thanh Nien News