Is Vietnam’s Day of Reckoning Coming?

The Asia Times suggests Vietnam is Asia’s prime candidate to be an over-stimulated “economic domino” — whose economy could collapse because of its weak currency, loose bank lending, and lack of confidence in the government’s economic management.

The online newspaper says last year’s massive government pump-priming that helped Vietnam outperform its regional peers may now lead to serious problems as the government tries to stabilize the currency and control inflation.  And the situation may not be helped by conflict between conservatives and liberals within the controlling Communist Party.

One research analyst with a European investment bank says Vietnam’s day of reckoning is “inevitable due to the government’s inability to raise revenues,” but another analyst says Vietnam does not show signs of a currency crisis because borrowing is largely under control and foreign investment continues.

More on Vietnam’s economic crisis

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