Taking Stock, December 2014 : An Update on Vietnam's Recent Economic Developments
The global economy is showing signs of recovery, but at an uneven pace; global growth is expected to rise modestly to 2.6 percent in 2014, and an average 3.3 percent in 2015-17. The gradual strengthening of activity in the Euro Area and especially...
| Main Author: | |
|---|---|
| Format: | Financial Sector Assessment Program (FSAP) |
| Language: | English en_US |
| Published: |
Washington, DC
2015
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/12/20452861/taking-stock-update-vietnams-recent-economic-developments http://hdl.handle.net/10986/21110 |
| Summary: | The global economy is showing signs of
recovery, but at an uneven pace; global growth is expected
to rise modestly to 2.6 percent in 2014, and an average 3.3
percent in 2015-17. The gradual strengthening of activity
in the Euro Area and especially the US will boost demand for
exports from developing East Asia and Pacific (EAP), helping
the region sustain its growth performance. There are early
signs of firming up of economic recovery in Vietnam. GDP
growth picked up to a relatively brisk 6.2 percent (y-o-y)
in the third quarter of 2014, contributing to an overall
growth rate of 5.6 percent for the first nine months of the
year. Credit growth continues to come in below target,
hampering the State Bank of Vietnam's efforts to carry
out credit expansion to support economic growth. The
Government has taken some important measures in 2014 to
improve business conditions, which are expected to bear
fruit from 2015 onward. The Government issued Resolution 19
(March 18, 2014), which prioritizes shortening the time for
processing and completion of administrative procedures,
reducing administrative costs, and strengthening
transparency and accountability of state administrative
agencies. The Financial Sector Assessment Program (FSAP)
provides a comprehensive framework to identify financial
system vulnerabilities and develop appropriate policy
responses. Recognizing its importance, in July 2012 the
Government of Vietnam invited the World Bank and the IMF to
initiate an FSAP for Vietnam. In recent years the
Vietnamese economy had shown signs of corporate and
financial distress, and slowdown in GDP growth. In response
to this, the government announced a comprehensive reform
program designed to address the problems faced by the
financial and corporate sectors. The FSAP provides a broad
set of policy recommendations that can be used to
operationalize the SEDP and the banking restructuring
program. The recommendations include recapitalization
plans, the workout of NPLs, regulatory and other reforms,
and the temporary extension of the safety net. |
|---|