Illustrative image (Source: VNA) HCM City (VNA) – The threat of macro-economic headwinds dragging global growth should be the impetus ASEAN needs to push its reform agenda harder in 2019, according to a report recently released by the HSBC Group. Amid improving intra-regional flows to offset global trade slowdown, ASEAN economies could partly offset any trade downturns if supply chain diversion to Southeast Asia materialises, but increasing the ease in which goods and services flow across ASEAN will make the transition more widespread, it said. However, more needs to be done to smooth the flow of goods and services across the bloc. This includes rolling out the ASEAN one-stop shop mechanism to all ASEAN countries, standardising the cost and time of customs clearance across Southeast Asia and enabling more free movement of professionals across the region. On the other hand, foreign direct investment into Southeast Asia has softened post-global financial … [Read more...] about HSBC: Global headwinds create impetus for ASEAN integration
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HSBC says further rate cuts unlikely
HSBC says further rate cuts unlikely Cong Minh By Cong Minh - The Saigon Times Daily HCMC - The State Bank of Vietnam (SBV) is unlikely to lower rates further after such a move last week due to rising inflationary pressures, according to HSBC Global Research. HSBC Global Research explained in its report dated July 19 that inflationary pressures had elevated due to the recent fuel price hike, potential rise in public service costs and cost pressures caused by the recent dong devaluation. Fuel retail prices increased again in Vietnam last week, the third time in just more than one month, hitting a record high of over VND24,570 per liter of petrol and VND22,310 a liter of diesel oil. In late June, the central bank raised the inter-bank exchange rate of Vietnam dong from VND20,828 to VND21,036 to the dollar. As the average inter-bank exchange rate had been kept unchanged for one and a half years, this adjustment is aimed to better reflect foreign currency supply and demand, thus … [Read more...] about HSBC says further rate cuts unlikely
HSBC warns of high inflation in Sept
HSBC warns of high inflation in Sept Thanh Thuong By Thanh Thuong - The Saigon Times Daily HCMC – Vietnam is facing risk of high inflation this month, according to the Vietnam macro economic report which HSBC Global Research released on Tuesday. The bank said Vietnam has a history of drastically higher inflation in August. The two highest peaks of inflation in the past decade came in August, at 28.3% in 2008 and 23% in 2011. Thus, after prices accelerated from 7.3% year-on-year in July to 7.5% this August, concerns about runaway inflation are resurfacing. “We expect headline inflation to continue rising in September due to higher education, healthcare and energy costs, especially when political uncertainties are accelerating and enterprises have to raise product prices due to high input costs,” the report said. What is supporting Vietnam’s growth is its strong export sector, supported by a rise of foreign direct investment (FDI) inflows, especially from … [Read more...] about HSBC warns of high inflation in Sept
HSBC worries about Vietnam’s credit loosening
VietNamNet Bridge – The HSBC Global Research team has expressed concern over Vietnam’s recent move to loosen credit to stimulate private sector and government spending. A report which HSBC released last Friday says credit easing suggests the Vietnamese Government’s pro-growth bias. The Government has confirmed the original 2016 gross domestic product (GDP) growth target of 6.7%. In early May, new Prime Minister Nguyen Xuan Phuc instructed ministries and agencies to do whatever it takes to achieve the growth target while reining in inflation. “We think this is going to be difficult to achieve, given the weakness of the first-quarter growth number and larger-than-expected headwinds to exports. That means the onus will fall on domestic demand to pick up the slack,” says the report. But larger-than-expected headwinds to trade mean that domestic demand, in particular investment, will have to rise strongly to make the growth target a reality. The … [Read more...] about HSBC worries about Vietnam’s credit loosening
HSBC warns Vietnam of low-middle income trap
VietNamNet Bridge – HSBC Global Research team has warned that the inefficient allocation of resources could sap productivity of Vietnam and leave the country caught in the low-middle income trap despite opportunities ahead including those from the trade pact TPP. The bank said in a recent report that U.S. President Barack Obama’s signing of the Trade Promotion Authority (TPA) suggested that the Trans-Pacific Partnership (TPP) negotiations may conclude in the months ahead. This is particularly positive for Vietnam, which still does not have a free trade agreement with America as its largest export market. HSBC believed the TPP would be beneficial for Vietnam, which has an advantage in low labor cost and this advantage will continue in the next two decades. “Labor productivity is among the lowest in the region but growing the fastest, thanks to more efficient foreign direct investment (FDI) sectors. We expect gross domestic product (GDP) to accelerate in the coming … [Read more...] about HSBC warns Vietnam of low-middle income trap