Monetary policy should not be used for too many goals: SSI experts

06-Oct-2017 Intellasia | Vietnam Finance | 6:00 AM Print This Post

The banking sector or monetary policy can not be used for too many goals, but it is necessary to spread the task of stimulating growth for all agencies with an aim to stimulate demand instead of stimulating supply”, according to Saigon Securities Inc (SSI) experts.

SSI’s September macro report showed, Q3/2017 recorded a remarkable growth of 7.64 percent (it was 5.15 percent in Q1 and 6.28 percent in Q2) thanks to the strong improvement of the processing industry sector with superior products namely electronic products.

Thanks to the launch of Galaxy Note 8 in late August, the industrial index of electronic sector surged 44.5 percent in September in comparison with the same period last year, marking the highest growth in the last 32 months. Therefore, the electronic industrial index in Jan-Sep was boosted to 25.1 percent (while it was 13.4 percent in the same period last year).

In addition to phones, other electronic products contributed $18.4 billion to the export value in Jan-Sep, accounting for 12 percent of total exports and a sharp increase of 41 percent year-on-year(in the same period last year, the rise was 13.1 percent).

Another prominent FDI project namely Formosa, has started working since late Q2 and expects to produce 1.5 million tonnes of steel with expected revenue of 16.8 trillion dong in 2017, making a significant contribution to GDP growth.

According to SSI, growth in Q3/2017 again confirms the importance of FDI and the need for special mechanisms to attract large-scaled FDI projects.

Crude oil output in September reached 1.06 million tonnes, down 9.9 percent over the same period. Other mineral mining enjoyed a high growth rate of 9.2 percent (7.7 percent in Q2/2017). Therefore, despite a decline of 8.08 percent year-on-year in the mining GDP, this fall was the lowest in the three quarters (the fall was 10 percent and 8.2 percent in Q1 and Q2).

Without the mining sector, the 2017 economic growth would reach 7.5 percent, the highest level in many years. This is an encouraging number and it is premise to believe that 2018 GDP growth will be over 7 percent when the mining sector recovers” SSI experts said.

In the first nine months of 2017, the GDP of the financial, banking and insurance sectors increased by 7.89 percent, the highest level in the past seven years, with the most important factor namely the process of dealing with bad debt and the growth of the stock market.

SSI believes that the economy is moving on the right track and this is the result of great internal efforts such as FDI attraction or the restructuring of the banking system that have taken place many years ago.

“Achieving the growth target of 6.7 percent in 2017 is no longer too important because macro-balances are in good shape and growing above 7 percent by 2018 is reachable,” SSI concluded.


Category: Finance

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