Vietnam: 2005 Article IV Consultation: Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Vietnam

IMF Staff Country Reports, January 24, 2006

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Canonical URL: Vietnam: 2005 Article IV Consultation: Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Vietnam

High credit growth in the context of weak bank balance sheets remains a cause for concern.
The overall fiscal deficit narrowed from 7.2 percent of GDP in 2003 to 4½ percent of GDP in 2004.
A growing program of off-budget operations has weakened fiscal transparency and heightened concerns about medium-term debt sustainability.
Improvements in the reliability, timeliness, and dissemination of key data are urgently needed to enhance the quality of policy analysis and surveillance.

High credit growth amid weak bank balance sheets is identified as a principal vulnerability.
Concerns focus on the implications of banking sector weaknesses for financial stability and economic performance.

Fiscal deficit trajectory:
- 2003 overall fiscal deficit: 7.2 percent of GDP
- 2004 overall fiscal deficit: 4½ percent of GDP
Policy concern: expanding off-budget operations that reduce fiscal transparency and raise medium-term debt sustainability concerns.

Key recommendation: improve the reliability, timeliness, and dissemination of key data.
Rationale: better data are urgently needed to enhance the quality of policy analysis and IMF surveillance.

Subjects: Commercial banks, Credit, Expenditure, Exports, External debt, Financial institutions, International trade, Public debt
Keywords: Asia and Pacific, authorities' plan, authority, budget, civil service wage structure, Commercial banks, CR, Exports, Global, government, government interference, ISCR, minimum wage, state equity ratio, Vietnamese authorities