Macroeconomic Forecast Vietnam

BMI View: GDP growth came in at 6.5% y-o-y in the first three quarters of 2008, a marked decline from the 8.2% recorded in the same period last year. We retain our bearish 5.5% GDP forecast for 2008, albeit acknowledging upside risks as the net export contribution to GDP growth improves. The deceleration of consumer price inflation in Q308 is encouraging, but we believe the government and the State Bank of Vietnam will have to maintain firm fiscal and monetary regimes well into next year, although an easing of monetary policy as inflation continues to fall in Q408 cannot be ruled out. We stand by our forecast of 7.0% GDP growth in 2009.

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