Vietnam, Cambodia and Laos

Current Economic Outlook

Despite the high export‐to‐GDP ratio, Vietnam has avoided a recession due to its large domestic demand and aggressive policy measures. Though the GDP growth rate halved in Q1 2009, the economy showed signs of revival in Q2 due to fiscal and monetary stimulus, inventory restocking and positive contributions from net exports. Asset markets are booming again due to speculation, capital inflows and stimulus measures, rather than an improvement in fundamentals. RGE forecasts Vietnam's growth to slow to 4.6% in 2009 due to contracting exports and foreign direct investment (FDI), and weak domestic consumption and investment.

Any weakening of global risk appetite or investor concerns about domestic vulnerabilities might cause a sharp correction in the real estate and equity markets. Vietnam will grow 5.6% in 2010 as exports will remain weak while policy stimulus will be scaled back due to inflation and fiscal deficit concerns. Under RGE's baseline scenario of a U‐shaped recovery in the U.S. and an anemic recovery in the EU, Vietnam will witness a U-shaped recovery…

Read the latest RGE Global Economic Update.