HSBC said in a report on Sep 5^th that with patience and strong reform momentum, when the dust settled, Vietnam should find itself in a trimmer shape and more ready to compete when the global economy recovered.

According to the report, even with higher domestic oil prices, inflation dropped to 5 percent year on year in August from 5.5 percent in July.

Exports, though lower than in previous years, have remained resilient in double digits. Foreign reserves have increased and the Vietnamese dong has stabilised, strengthening the State Bank of Vietnam’s credibility.

These positive developments could not have happened without the political will to control the overheated economic growth, the report emphasized.

Business conditions are still weak but not free-falling, it commented, adding that demand for Vietnamese goods is rising despite the impact of the global crisis.

HSBC Vietnam economists said they expect domestic consumption to recover slightly towards year-end, especially with credit arrangements expanding.

On a year on year basis, export growth in August climbed to 13 percent from 1.6 percent in July.

While domestic demand remains weak, external demand for Vietnamese goods seems to be picking up. 

The report also noted that Vietnam continues to attract tourists, boosting sales in the service and tourism sector.

Policy makers have proven in the years that they are able to address challenges as a patient approach to reform, will solve bad debts and create a healthy economic system, the report concluded.

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