HO CHI MINH CITY – With the streetlights warming to a low glow outside as dusk turns to dark, Trang Hoang Yen is still running t-shirts through a sewing machine as most of her staff leave for home. “Normally we have a lot more workers, but the past year has been very hard for our sector,” she says, stopping work for a few minutes to talk.
HO CHI MINH CITY– With average per capital annual incomes of just over US$1,000, Vietnam is officially a lower-middle income country. In Hanoi, the seat of government and commercial capital Ho Chi Minh City – still popularly known as Saigon – property prices are on an upward curve with new buildings sprouting-up faster than new growth in Vietnam’s lush tropical rainforests. But Vietnam must also address rising inflation, forecast by Standard Chartered Bank at 19.7 percent in December and with an 11.3 percent rise forecast for 2012. The Dong is expected to continue to depreciate throughout the year, given Vietnam’s US$8 billion current account deficit and low foreign currency reserves. With the State Bank of Vietnam attempting to sop up liquidity, tight monetary policy is starting to put pressure on the banking sector, with the result that some small banks have raised interest rates as high as 18 percent despite a request from the bank to keep it to 14 percent.