A report recently released by Hong Kong-Shanghai Banking Corporation (HSBC) showed that Vietnam’s economy would be more stable as interest rates in dong (VND) were following a downward trend.
HSBC said that the Vietnamese government’s efforts to reduce demand seemed rather successful. In March, the prices of petrol and gas increased by 10 percent, but the rate of inflation dropped to 14.2 percent from 16.4 percent in February.
Judging from the current low level of domestic demand, HSBC forecast that inflation would continue to slow down this year, and the State Bank of Vietnam might reduce interest rates in VND by 1 percent each quarter.
HSBC predicted Vietnam’s economic growth rate at about 5.7 percent this year as domestic demand would drop to a level lower than expected.