Economy / Vietnam
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Conditions Stabilising, But Risks Remain
July 2008 | Economic AnalysisSorry, you must be a subscriber to view this article in full. If you are a subscriber please login.
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BMI View: We envisage a turnaround in inflation in the third quarter as growth continues to slow. This will improve investor sentiment towards Vietnam and we foresee the 12-month NDF contract falling from its present level of VND20,600/US$ towards our end-08 target of VND18.000/US$ and a further decline in the 5-year credit default swap from 326.7bps towards 300bps and possibly beyond over the coming months. There are, however, risks to this scenario, mainly in the form of policy missteps by the government, which continues to view a sharper slowdown in growth as a threat to political stability.