Despite difficulties in 2008, Vietnam’s exports hit a record high of nearly US$64 billion. The National Assembly has set a target for the export sector to rake in US$72 billion this year, up 13 percent. This is an ambitious target given the unexpected fluctuations in the world economy. According to craft associations, exports to Vietnam’s major markets such as the United States, the European Union and Japan are expected to fall by between 25-30 percent compared to 2008. In particular, the US, which makes up 20 percent of Vietnam’s exports, is forecast to import 30 percent less than last year. A recent report released by the import-export management group shows that Vietnam will face fierce competition with other exporters worldwide. At the same time, the country is likely to become a dumping market for foreign exporters, driving up the trade deficit. However, the picture is not completely gloomy. The Deputy Governor of the State Bank of Vietnam, Nguyen Dong Tien, … [Read more...] about How will exporters weather the financial storm?
Market storm global
Tax Holidays For Troubled Markets By Ngoc Lan Tax holidays are necessary for many businesses to survice th tough times In 2009, the Government offered timely tax adjustments to help enterprises cope with the economic storm. Perhaps the same approach is justified this year, when the economy is also in trouble. Purchasing power rose by only 5% in the first three months. In the same period of previous years, the rates of increase often exceeded 10%. It is also worrisome that 12,000 companies went out of business or had to stop paying tax. There is thus a need for the Ministry of Finance to offer tax adjustments in line with the Government’s Resolution 01 to get the economy back on track. More burden The State’s budget revenue depends mostly on domestic sources, especially crude oil (about 21% of gross domestic product – GDP) and tax and fees (some 22% of GDP). According to the Ministry of Finance, the latter component constantly exceeded expectation in 2007-2010 (up … [Read more...] about Tax Holidays For Troubled Markets
A flood of easy money courtesy of the European Central Bank made for a calm start to 2012 but a poor Spanish bond sale last week signals it may only have been a lull before the debt storm breaks, analysts warn. The ECB injected roughly one trillion euros ($1.3 trillion) into eurozone banks at auctions in December and February, helping to ease concerns banks would face a funding crunch. Some of this cash ended up in the sovereign bond markets, helping reduce the rates countries need to pay to raise funds after a year of high tension over whether Italy and Spain -- the eurozone's third- and fourth-largest economies -- might also need to be bailed out after Greece, Ireland and Portugal. "The first quarter was exceptional for eurozone state borrowing," said Jean-Francois Robin at France's Natixis bank. The first three months of the year are important as countries often try to meet a huge chunk of their annual borrowing needs at the outset and they made the most of the early … [Read more...] about Europe may be heading back into debt storm
Given the realities of this year's global and domestic economies, local businesses are likely to face more hurdles, a so-called storm, in 2012, said Alan Phan, an overseas Vietnamese businessman in a recent talk with HCMC banking students. Some 33 percent of such businesses have dissolved so far this year, he said, quoting data from the Vietnam Chamber of Commerce and Industry. These failures were caused by the overuse of leverage tools and rapid credit expansion into stock and real estate markets in the past years, he added. "But those who have a strong foundation, including specific products and technologies, will probably continue to maintain their own market segments or even expand their market share and find new partners," said Phan, who has run his business in the US and China for 42 years. For young Vietnamese, this can be considered a golden age for those who are ready to start up new businesses with a new way of thinking, as the country emerges from the economic … [Read more...] about Brace for coming storm, but learn to thrive: expert
If European banks are forced to cut back lending to rebuild shot balance sheets, the ensuing credit shock could hit developing countries worldwide as much as those at the center of the euro zone storm. With Europe's banks accounting for almost two thirds of the foreign lending to global emerging markets, the fear is their retrenchment could drain those economies set to provide about 70 percent of world growth next year. This latest so-called "negative feedback loop" from the euro zone sovereign debt crisis is yet another potentially damaging blow to a global economy already experiencing shocks to both business sentiment and planning as well as bank funding strains. An echo of the global reverberations caused by the Lehman Brothers bust through the winter of 2008/09, this transmission mechanism may have weakened slightly over the past two years due to more regulatory safeguards but still underlines the viral impact of banking shocks in an interconnected global system. It also … [Read more...] about Euro bank troubles risk new emerging market jolt