Recently announced macro report in July 2012 of Vietnam Commercial Joint Stock Bank for Foreign Trade (Vietcombank-VCB) Securities Joint Stock Co (VCBS) said that it is likely that Vietnam’s consumer price index (CPI) in August will no longer drop strongly like two previous months as the prices of oil and gasoline, gas and hospital charges have started increasing since the end of July while the price of education group will be also able to surge because the new school year will start soon.
Accordingly, CPI in Q3 is forecast to rise about 5.4 percent over the same period last year.
According to General Statistical Office (GSO), CPI in July dropped 0.29 percent from June and rose 5.35 percent over the same period last year. The strong decline of food and foodstuff prices has led to negative CPI in July for the first time in the past nine years.
The report also stated that the risk of economic growth reduction at present is not at the level of concern but it has showed signs. Therefore, the government should have a proactive fiscal policy and speed up a number of fiscal policies.
With the current policies of the government, VCBS expects production activities of enterprises will be improved at the end of the third quarter and early fourth quarter. VCBS forecasts Vietnam’s 2012 growth at 5.4%.
Commenting on Vietnam’s banking sector, VCBS said credit growth will be improved and bad debts will be reduced gradually in the coming months, but it will be very difficult to achieve the credit growth target of 8 percent – 10 percent in the remaining six months of this year.
The primary and secondary bond market still attracts the attention of credit institutions and the transactions continue to be vibrant in July while winning coupon rate and bond yields tend to reach medium-term stability level. But if inflation falls further, the bond yields can be reduced.