The headquarters of the State Bank of Vietnam in downtown Hanoi. (Photo: SBV) Carolyn Turk, WB Country Director in Vietnam, said the globaleconomy will likely enter a period of turbulence while it's struggling withslow growth, decreased demand, high inflation and central banks around theworld tightening credit.
Turk's comment was made in the aftermath of an event in whichthree US banks: Silicon Valley Bank (the US's 16th largest bank), SilvergateBank and Signature Bank, one after another, collapsed in a week. She said theramifications of such an event will likely follow within a short time andconsequences be felt across the global financial market, which commandspolicymakers to pay attention and plan for necessary interventions.
She said there are many similarities that can be observed betweenthe above-mentioned US banks and the Vietnamese banking system, especially insmaller banks.
It highlighted the importance of a strong grip on the financialsector to ensure the central Government stays up-to-date with currentdevelopments and relevant data, and is able to respond in a timely manner, Turkadded.
Vietnam's economic growth is projected to ease to 6.3% in 2023from a robust 8% last year, as services growth moderates and higher prices andinterest rates weigh on households and investors, according to the World Bank'sreport released on March 13.
Service has become the largest sector of Vietnam's economy,increasing from 40.7% of GDP in 2010 to 44.6% in 2019. The employment share ofthe sector also rose from 29.6% in 2010 to 35.3% in 2019. As the largest sourceof employment, it has absorbed a significant portion of the workforce from theagriculture sector.
However, labour productivity and efficiency in Vietnam’s servicesector remain low compared to other countries, reaching 5,000 USD per worker in2019 in comparison to 20,900 USD in Malaysia, 9,300 USD in the Philippines and 7,300USD in Indonesia./.
VNA
