Vietnam Business Forecast Report Q2 2008

Publication Date	March 2008
Publisher	Business Monitor
Product Type	Report
Pages	55
ISBN Number	1745-0764
Product Code	BMI00745

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Summary

Executive Summary

A Testing Year, but Long-Term Trends Intact We Believe 2008 Will See A Temporary Drop in Gdp Growth as Vietnam Grapples with Inflationary Conditions at Home and A Sharp Slowdown in The Us, Its Largest Export Market. We Have Consequently Lowered Our Gdp Growth Forecast for The Year from 8.2% to 7.0%, but We Believe That Growth Should Return above 8% in 2009 and beyond as Domestic and Global Conditions Improve. There Is, However, A Risk That Shortterm Concerns Will Take The Government's Focus off The Important Task of Market Reform and Thereby Impair Long-Term Growth. on The Political Front, We Are Expecting Domestic Dissent to Remain Subdued While Vietnam's International Profile Will Benefit from Its Admission into The United Nations Security Council on January 1 2008.

2008 Is Set to Be A More Testing Year for The Rapidly Expanding Vietnamese Economy as The Government Struggles to Bring Inflation Back under Control. We See Inflation Remaining in Double Digits for Much of H108, before Falling Back into Single Digits towards The End of The Year. We Believe There May Be Disruptions in The Manufacturing Sector Due to Weaker Orders from The Us, but Industrial Output Growth Should Remain at 15-17% on The Back of Strong Fdi Inflows. The Booming Property Sector and Heavy Investment in Infrastructure Should Also See The Construction Sector Underpinning Gdp Growth in 2008 and 2009.

Economic Development Will Continue to Top The Government's Agenda over Our Five-Year Forecast Period.

However, with The Frictions of Rapid Economic Growth Becoming Increasingly Apparent, We Believe Much of The Government's Focus in 2008 Will Be to Reduce Inflationary Pressures and Cool Overheating Tendencies in The Property Market. The Increasingly Stretched Economic Conditions of Low-Income Households Have Raised The Risk of Street Protests, Which Could Evolve into A Wider Challenge to Oneparty Rule, but We See No Significant Risk of Political Unrest. Internationally, Vietnam Will Benefit from A Raised Diplomatic Profile as A Un Security Council Member over The next Two Years.

The Current Large-Scale Expansion of Vietnam's Infrastructure Will Continue for Much of Our Five-Year Forecast Period as Investment Has Been Forthcoming from International Donors, with Pledged Official Development Assistance for 2008 Hitting A Record of Us$ . Bn. The Less Tangible Process of Improving The Functioning of The Domestic Economy through A Higher Degree of Market Practices Is, However, Likely to Be Stalled by Short-Term Concerns as The Stock Market Appears Unable to Absorb Planned Ipos of State-Owned Enterprises. We Are Also Expecting Efforts to Improve Education to Take The Backseat to Measures Aimed at Ensuring Macroeconomic Stability.

Content

Executive Summary
- A Testing Year, but Long-Term Trends Intact
Chapter 1: Politcal Outlook
- Swot Analysis
- BMI Political Risk Ratings
- Domestic Politics
- Political Opposition Contained, but Economy A Worry
- The Vietnamese Government Faces A Number of Challenges in 2008, Chief among Which Is Bringing Inflation Back
- under Control as Lax Monetary Policy Has Propelled Price Growth into Double Digits.
- Table: Vietnam Cabinet
Chapter 2: Economic Outlook
- Swot Analysis
- BMI Economic Risk Ratings
- Economic Activity
- BMI's 2008 Gdp Forecast Cut to 7.0%
- We Have Decided to Downgrade Our 2008 Gdp Forecast from 8.2% to 7.0% as Domestic and External Factors
- Temporarily Take The Froth off The Vietnamese Growth Story.
- Table: Economic Activity
- Monetary and Exchange Rate Policy
- Continued Monetary Tightening to Curb Growth
- Vietnam Has Belatedly Signalled That It Will Address Rocketing Inflation by Implementing A Number of Monetary
- Tightening Measures in Q108.
- Table: Vietnam - Exchange Rate Policy
- Property Sector
- Property Boom to Support Economy
- Vietnam Stands out as A Bright Light in The Global Real Estate Market, amid The Current Risk-Averse Global
- Investment Climate.
Chapter 3: Special Report
- Looking beyond 2008
- Us: The Rebalancing Act
- Unwinding The Imbalances
- We Believe That A Substantial, Multi-Year Shift in The Us External Accounts Is under Way.
- China: What If We're All Wrong?
- Our Core Scenario for China
- We Are Retaining Our Positive Headline Growth Projections for China across The Forecast Period to 2012, with
- Our Expectations of The Continued Success of The Urbanisation Process and Export-Driven Growth Model
- Underpinning Our Assumptions.
- Japan: Immigration Key to Long-Term Growth
- Demographic Woes Portend Long-Term Decline
- Immigration Remains The Only Realistic Way That Japan Can Overcome Its Long-Term Economic Challenges. Chapter 4: Business Environment
- Swot Analysis
- BMI Business Environment Risk Ratings
- Business Environment Outlook
- Table: BMI Business and Operational Risk Ratings
- Institutions
- Table: BMI Legal Framework Ratings
- Infrastructure
- Market Orientation
- Table: Demographic Indicators
- Table: Asia, Fdi Inflows
- Table: Top Export Destinations
- Table: BMI Trade Ratings
- Operational Risk
Chapter 5: Key Sectors
- Food and Drink
- Executive Summary
- BMI Is Forecasting Sales Growth in Vietnam's Mass Grocery Retail Sector of A Phenomenal 121.8% to 2012,
- While Value Sales in The Alcoholic Drinks Industry Are Forecast to Increase by A Healthy 46.9% over Our Five-Year
- Forecast Period.
- Table: Vietnam - Food Consumption, Category Sales & Industry Trade Indicators
- Pharmaceuticals & Healthcare
- Executive Summary
- The Vietnamese Pharmaceutical Market Should Reach Us$1.75bn at Consumer Prices by 2012, up from An
- Estimated Us$958mn in 2007.
- Table: Drug Expenditure Forecasts, 2006-2012
- Table: Vietnam Health Expenditure Forecast Indicators, 2006-2012
- Table: Vietnam Prescription Drugs Market Forecast Indicators