World Bank: Vietnam Performed Well Despite Global Crisis

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Jul. 6 – A World Bank report released in June lauded Vietnam’s progress in 2009 saying that the country had navigated the global crisis better than many other nations.

The report attributes this to the government’s flexibility in the face of rapidly changing economic conditions. Vietnam’s GDP grew by 5.3 percent in 2009, even registering higher at 6.9 percent during the last quarter, an impressive achievement considering that exports contributed to around 67 percent of GDP during the crisis.

Vietnam’s quick action also led to a compulsory bond being issued to manage asset price bubbles and cut excess liquidity. During that time, authorities also implemented an interest rate subsidy scheme that helped companies refinance debts quickly.

The World Bank recommends that Vietnam allow market transparency to help policy shifts become more effective. It says that markets are not sure what the government is up to thus they usually need to see huge changes in the policy to be convinced that a decision was effective.

Vietnam can exert better macroeconomic management to keep the economy stable and prevent the fluctuations that have been regularly plaguing the country in the past three years, the report said.

The World Bank report can be downloaded here.