World Bank2017-06-132017-06-132011-12-06https://hdl.handle.net/10986/27090Prospects for the global economy have become less certain in the second half of 2011, with significant increase in downside risks. Developing countries in East Asia are growing faster than developed countries, but they too are facing challenges due to a combination of reasons including: slower expansion in demand in developed countries; the impact of global uncertainty on investor sentiments; natural disasters; and the withdrawal of stimulus policies. Vietnam's growth slowed in 2011 compared to 2010, though it is still expected to reach around 5.8 percent. The external sector has remained relatively stable. The current account deficit declined in 2011, as export performance outpaced imports and remittances grew robustly. Both import and export values saw a dramatic rise, mostly because of higher commodities prices. External debt remains sustainable, as the current account deficit was more than covered through medium-term capital inflows that are largely non debt-creating (foreign direct investments) or contracted on concessional terms (official development aid). Foreign direct investment inflows continued at a steady pace, although new commitments declined. International reserves increased in the first half of the year while the Vietnamese dong benefitted from a period of relative calm. In the last quarter of the year, however, exchange rate fluctuations increased due to volatility in gold prices, deepening uncertainties and the seasonal increase in demand for foreign currency as the year end approaches. In the longer run, Vietnam's ambition to maintain high growth into the next decade will require as bold a set of reforms as the one adopted with Doi Moi. The challenge is arguably more difficult than the previous one, and few countries in the world have accomplished it. Vietnam is endowed with a young and hard-working labor force. This is a vital asset to meet the country's ambitious goals, if the country manages to equip itself with relevant skills, and match it with necessary capital. It also needs a level-playing field to maximize its potential. As people become more educated and production becomes more sophisticated, demands for predictability, trust and a level playing field will grow. Transparency is a critical element in this. Concentration of economic power in a small number of large firms undermines efforts at creating a level playing field. Large firms and industries that circumvent rules to their advantage are promoting corruption, and undermining efficiency, which damages the country's potential. The governance challenges are complex, but Vietnam's medium term outlook will be much better if they are addressed sooner rather than later.en-USCC BY 3.0 IGOACCOUNTINGADVANCED ECONOMIESAGRICULTURAL COMMODITIESASSET QUALITYBANK LOANSBANK PORTFOLIOSBANK SUPERVISIONBANKING SECTORBANKING SECTORSBANKING SUPERVISIONBANKING SYSTEMBANKRUPTCYCAPACITY CONSTRAINTSCAPITAL ADEQUACYCAPITAL INFLOWSCENTRAL BANKCLARITYCOALCOMMERCIAL BANKCOMMERCIAL BANKSCOMMODITYCOMMODITY EXPORTCOMMODITY PRICESCOMPLIANCE COSTSCONFIDENTIALITYCONSUMER CONFIDENCECONSUMER PRICE INDEXCONTINGENT LIABILITIESCORE INFLATIONCORPORATE GOVERNANCECPICREDIT GROWTHCREDIT INSTITUTIONCREDIT INSTITUTIONSCURRENCY COMPOSITIONCURRENT ACCOUNTCURRENT ACCOUNT DEFICITDAMAGESDEBT CRISISDEBT OUTSTANDINGDEBT SERVICEDEBT STOCKDEBT SUSTAINABILITYDEBTSDEPOSITDEPOSIT RATESDEPOSITSDEPRECIATIONDEVALUATIONDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPMENT ASSISTANCEDIFFICULTIES DUEDISBURSEMENTSDISTORTED INCENTIVESDOLLAR EXCHANGE RATEDOMESTIC BANKSDOMESTIC DEMANDECONOMIC CRISISECONOMIC DEVELOPMENTECONOMIC DEVELOPMENTSECONOMIC GROWTHECONOMIC POWERECONOMIC SLOWDOWNENVIRONMENTALENVIRONMENTAL IMPACTEXCHANGE RATEEXCHANGE RATE FLUCTUATIONSEXPENDITUREEXPENDITURESEXPORT EARNINGSEXPORT PERFORMANCEEXPORT VOLUMESEXPOSUREEXTERNAL BALANCEEXTERNAL BORROWINGEXTERNAL DEBTEXTERNAL SHOCKSFINANCE CORPORATIONFINANCIAL CRISISFINANCIAL MANAGEMENTFINANCIAL MARKETFINANCIAL SECTORFINANCIAL SECTORSFISCAL CONSOLIDATIONFISCAL DEFICITFISCAL DEFICITSFISCAL POSITIONFISCAL POSITIONSFOOD PRICEFOOD PRICESFORECASTSFOREIGN CURRENCIESFOREIGN CURRENCYFOREIGN CURRENCY LOANSFOREIGN DIRECT INVESTMENTFOREIGN DIRECT INVESTMENTSFOREIGN EXCHANGEFOREIGN EXCHANGE MARKETFOREIGN INVESTORSFORESTRYGDPGENERAL EQUILIBRIUMGLOBAL ECONOMYGLOBAL FINANCIAL MARKETGOLDGOLD PRICESGOVERNMENT DEBTGROSS DOMESTIC PRODUCTGROWTH RATEGROWTH RATESHARD CURRENCIESHIGH INFLATIONHIGH-INCOME COUNTRIESHOLDINGHOLDINGSIMPORTIMPORT GROWTHIMPORT PRICESIMPORT RESTRICTIONSIMPORTSINCOMEINCOMESINDUSTRIAL COUNTRIESINELASTIC DEMANDINFLATIONINFLATIONARY EXPECTATIONSINFORMATION DISCLOSUREINTEREST RATEINTEREST RATE CAPINTEREST RATESINTERNATIONAL BEST PRACTICESINTERNATIONAL FINANCEINTERNATIONAL PRICEINTERNATIONAL RESERVESINVESTMENT EXPENDITURESINVESTMENT INFLOWSINVESTMENT OPPORTUNITIESINVESTMENT PROJECTSISSUANCELABOR FORCELEVEL PLAYING FIELDLIENLIQUIDITYLIQUIDITY CONSTRAINTSLOAN PORTFOLIOSLOAN REPAYMENTSLOCAL GOVERNMENTLOW INTEREST RATESMACROECONOMIC CONDITIONSMACROECONOMIC ENVIRONMENTMACROECONOMIC STABILITYMARKET FAILURESMARKET MECHANISMSMARKET PARTICIPANTSMATURITIESMONETARY AGGREGATESMONETARY AUTHORITIESMONETARY FUNDMONETARY POLICIESMONETARY POLICYMONEY SUPPLYNATURAL DISASTERSNATURAL RESOURCESNET CAPITALNON-PERFORMING LOANNON-PERFORMING LOANSNPLOIL EXPORTOIL EXPORTSOIL PRICEOIL REVENUESOTHER CURRENCIESOUTPUTOUTSTANDING LOANSPOVERTY REDUCTIONPRESENT VALUEPRICE CHANGEPRICE CHANGESPRICE OF OILPRIMARY COMMODITIESPRINCIPAL EXPORTPRODUCERSPUBLIC DEBTPUBLIC EXTERNAL DEBTPUBLIC INVESTMENTPUBLIC INVESTMENTSRAPID EXPANSIONRAPID GROWTHREAL ESTATEREGIONAL TRADEREGULATORY FRAMEWORKREMITTANCEREMITTANCESREPAYMENTRESERVESRESOURCE ALLOCATIONRETURNRETURNSRISK MANAGEMENTSECURITIESSLOWDOWNSOVEREIGN DEBTSTABILIZATION POLICIESSTATE BANKSTATE ENTERPRISESSTORE OF VALUESTRATEGIC INVESTORSSTRUCTURAL REFORMSSURPLUSTAXTECHNICAL ASSISTANCETERMS OF CAPITALTIGHT MONETARY POLICIESTOTAL CREDITTOTAL DEPOSITTOTAL EXPORTTOTAL EXPORTSTOTAL EXTERNAL DEBTTRADE DEFICITTRADINGTRANSPARENCYUNCERTAINTIESUNCERTAINTYVOLATILITYWITHDRAWALReportWorld Bank10.1596/27090