The Hong Kong and Shanghai Banking Corporation (HSBC) on September 5 released its report on Vietnam ’s macro economy, expressing its optimism about the country’s economic prospect.

“ With patience and strong reform momentum, when the dust settles, Vietnam should find its self in a trimmer shape and more ready compete when the global economy recovers,” it said.

According to the report, even with higher domestic oil prices, inflation dropped to 5 percent year on year in August from 5.5 percent in July. Exports, while slower than previous years, have remained resilient in double digits. Foreign reserves have increased and the Vietnamese dong has stabilised, strengthening the State Bank of Vietnam ’s credibility.

These positive developments could not have happened without the political will to slow an overheated economy, the report emphasised.

Business conditions still weak but not free-falling, it commented, adding despite the global slowdown, demand for Vietnamese goods is still holding up.

HSBC Vietnam economists said they expect domestic consumption to recover slightly towards year-end, especially with the credit expansion filtering through the economy.

According to them, strong evidence against an economic meltdown is the robust performance of exports. On a year on year basis, export growth in August climbed to 13 percent from 1.6 percent in July.

While domestic demand remains weak, external demand for Vietnamese goods seems to be picking up.

The report also noted that Vietnam continues to attract tourists, boosting sales in the service and tourism sector.

“Thus, we are optimistic that the Vietnamese Government will ultimately do what’s good for the economy,” it said.

Policy makers have proven in the past that they are willing to address challenges when they need to. This requires a more patient approach to reform, which mops up bad debt and creates an economic system that rewards productive behaviours, the report concluded.-VNA