Hanoi (VNA) - The market research company Market Intello forecast thatthe average interest rate this year would reduce by 0.5 percentage pointscompared with 2016.
In the “Vietnam Macroeconomic Report - May 2017” released recently, MarketIntello expected the short-term deposit rates to drop to 4.5 percent for thethree-month term and 6.3 percent for the 12-month term due to inflationmanagement measures of the State Bank of Vietnam and the Government.
The research company also anticipated that exchange rates would increase bybetween 1 percent and 1.5 percent as the US Federal Reserve’s plans to raiserates twice in June and September may put pressure on the exchange rate.
In addition, the trade deficit may make the demand for US dollars rise muchmore than in 2016, it said, adding however, that the Vietnamese dong willnot be depressed because of the ability to control inflation below 4 percentand abundant foreign reserves of the State Bank of Vietnam.
Under the report, Market Intello also maintains its forecast for Vietnam’s economicgrowth at 6.1 percent in 2017.
“Agriculture is expected to recover slightly but the decline in the miningindustry will impact the economic growth considerably,” it said.
Market Intello cut the CPI forecast to around 3.8 percent, explaining thatraising electricity prices could push up inflation in the third quarter, butweak domestic demand will hold inflation under the inflation target.
According to Market Intello, boosting investment from the domestic economicsector should be the biggest challenge in improving Vietnam’s economy for therest of the year.
“The Government has taken actions to accelerate capital disbursement from theState budget and improve the business environment for the private sector.However, until April 2017, the rate of capital disbursement from the budget wasslower than the target rate,” it said.-VNA
VNA
