The ninth annual Vietnam CFO Forum focused on the development of finance in a digital era (Photo: VNA) HCM City (VNA) - The functionof finance has developed remarkably in recent times to meet the constantchanges brought about by technological evolution, heard a seminar in Ho ChiMinh on November 22.
“Finance now is not only controlling orsaving expenditure but also has a very important effect on businessesstrategy,” Hiroaki Endo, Asia President of the International Association ofFinancial Executives Institutes, said in his opening speech at the ninth annualVietnam CFO Forum.
“There are many enterprises that haveadopted new technologies including artificial intelligent (AI). But the futureof finance in the digital era needs to be discussed more.”
Nguyen Xuan Thanh, lecturer in publicpolicy, Fulbright University Vietnam, spoke about the Asian and Vietnameseeconomic outlook.
“This year global economic activity hasbeen strengthened. In Asia, higher domestic demand sustains growth in China.Indian growth suffers from currency demonetisation and tax reform while strongexternal demand boosts growth in ASEAN.”
In Vietnam, after a slowdown in the firstquarter, the economy grew strongly in third quarter, at 7.5 percentyear-on-year. The economy is expected to grow by 6.7 percent this year, hesaid.
“However, Vietnamese economic growth isunderpinned by strong FDI-led manufacturing activity and services.”
Its manufacturing Purchasing Managers’Index (PMI) indicated strong manufacturing performance compared to othereconomies in the region, he said.
The economic growth is driven by bothstrong private consumption and exports, he said.
“Private consumption rose by 7.3 percentyear-on-year in the first nine months of this year while exports went up 20 percent.”
Low inflation and the stable exchange rateare other reasons for the high economic growth, he said.
“Headline inflation rose early this yeardue to adjustments made to government administered prices (in health andeducation), while core inflation remains low at 1.3 percent.
“The exchange rate has remained stable whilestrong FDI flows and remittances have increased foreign exchange reserves to 45billion USD from 39 billion USD late last year.”
But the limited fiscal space is a bigproblem for the economy.
“The government has been running a budgetdeficit of around 6 percent of GDP in the last five years, public debt as apercentage of GDP is approaching the 65 percent statutory ceiling, and somefiscal consolidation is expected in 2017 with a target for the primary deficitof 3.5 percent.
“The 6.7 percent GDP growth this year willhelp reduce the public debt level to 62.6 percent of GDP (down from 63.6 percentin 2016).”
To stimulate growth, the Government has anaccommodative monetary policy, he said.
“The pressure on the Government to achievethe growth target with limited fiscal space means monetary policy has to bevery accommodative with policy interest rate already cut by 0.25 percent andlending rate by 0.5 percent while the credit growth target has been revised upfrom 18 to 21 percent.”
Next year the Government hopes to achieveGDP growth of 6.5 – 6.7 percent, and could also hike taxes to compensate forthe narrow fiscal space, he said.
Chun Wee Chiew, head of policy at theAssociation of Chartered Certified Accountants (ACCA) spoke about ethics in thedigital age.
“Eighty nine percent of people who wereasked [in a global survey] believed that strong ethics will become moreimportant in the digital age.
“Ninety four percent agreed that thefundamental principles for accountants established by the International EthicsStandards Board for Accountants still apply and remain relevant in the digitalage.”
These principles are integrity,objectivity, professional competence and due care, confidentiality, andprofessional behaviour.
Chun listed three action points required byprofessional accountants: acquiring knowledge of emerging technologies anddigital issues, combining process control with a strategic view and evaluatingmechanisms for reporting unethical behaviour.
The conference was organised by the VietnamChief Finance Officers Club in co-operation with the Japan Association forChief Financial Officers (JACFO) and the ACCA, and over 300 CFOs took part.-VNA
VNA
