Transcript IMPACT OF FINANCIAL CRISIS ON VIETNAM’S ECONOMY

IMPACT OF FINANCIAL
CRISIS ON VIETNAM’S
ECONOMY
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MACROECONOMIC
INDICATORS (1)
The more integrated into the world
economy, the more Vietnam’s economy
affected by the up and down in the world
economy.
GDP declines: 2007: 8,4%; 2008 6,5%;
2009: 4,5% - 48%
High inflation (2006: 6%;
2008: 23%)
2007: 12%,
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MACROECONOMIC
INDICATORS (2)
VN Index was slashed by more 50%.
Increasing trade deficit.
Unemployment is high (more than
300.000 at the end 2009)
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FINANCIAL CRISIS AND
STABILITY
What are the threats to peace and
stability?
Vietnam Government emphasizes on
non- traditional security problems:
 Food, energy, financial security
 Poverty
 Inequality
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GOVERNMENT MEASURES
(1)
Vietnam Government approved a
stimulus program of $ 6 billion.
Stimulus measures are aimed at
subsidizing/compensating interest rates
for enterprises.
Develop infrastructure .
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GOVERNMENT MEASURES
(2)
Helping low income families
Providing Financial assistance for
unemployment
Encouraging companies to look for new
export markets
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GOVERNMENT MEASURES
(3)
Encouraging companies to buy
equipment, machines, technology for post
crisis business.
Looking for Foreign Direct Investment.
 Stimulus program gives a positive result.
GDP in the first quarter increased by
3,1%; exports rose by 2,4%, trade deficit
declined.
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WHAT SHOULD WE DO TO
COPE WITH FINANCIAL
CRISIS AT REGIONAL LEVEL?
Standing aside and hoping
the problem goes away is not a
good idea.
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RECOMMEDATIONS
(1)
1/ Increasing the active role of regional
governments as a market stimulator and
supervisor.
2/ Enhancing intra - trade in Asia, reducing
the impact of the slowdown in US/EU
demand on Asian exports.
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RECOMMEDATIONS
(1)
3/ Reducing the dependence of Asian
Economies on US dollar (in the context of
dollar volatility): Multilateralization,
Asian Currency Cooperation.
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RECOMMEDATIONS
(1)
4/ Improving regional financial surveillance
mechanisms (an early surveillance, legal
framework, risk management skills and
policy coordination) as well as risk
pricing capacity
5/ Finding new channels to help
enterprises to cope with the current
drying-up of liquidity.
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