Presentation on theme: "1 IMPACT OF FINANCIAL CRISIS ON VIETNAM’S ECONOMY."— Presentation transcript:
1 IMPACT OF FINANCIAL CRISIS ON VIETNAM’S ECONOMY
2 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%)
3 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
5 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.
6 GOVERNMENT MEASURES (2) Helping low income families Providing Financial assistance for unemployment Encouraging companies to look for new export markets
7 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.
8 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.
9 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.
10 RECOMMEDATIONS (1) 3/ Reducing the dependence of Asian Economies on US dollar (in the context of dollar volatility): Multilateralization, Asian Currency Cooperation.
11 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.