1 impact of financial crisis on vietnam’s economy
Post on 24-Dec-2015
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1
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%; 2007: 12%, 2008: 23%)
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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)
4
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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