Thematic Report

Foreign exchange (FX) reserves by the end of 2019 was estimated at USD80 billion – or 3.8 months of import cover

GDP is estimated at 7.03% in 2019 - the second year to witness >7% GDP

Moody’s reaffirms Vietnam’s Ba3 ratings but downgrades the outlook after completing the downgrade review begun on October 9, 2019 Lower outlook is a warning sign but not likely to be overly negative

The trade surplus in November suddenly jumped up to USD1.45 billion

FTSE upgrade prospect High potentialities in the next year

World oil prices are surging, WTI oil of the US are being traded close to the 2-month highs

PMI & IIP showed contrasting movements

State Bank of Vietnam (SBV) tightens rules on state-owned commercial banks but relaxes prudential ratios for private-sector commercial banks

Inverted yield curve is dangerous, and Fed is responding slowly Fed has to cut interest rates at least twice this year If a recession occurs, the lag will be much later than that in the past The risk of a recession of the US economy is not high in 2019-2020 and the US stock market still has room for development

It is likely that Vietnam will still be in the watchlist for currency manipulation by the US in the upcoming period as two criteria for this tag of Vietnam will hardly change significantly. There is still a possibility that the US will raise tariffs imposed on some certain commodities from Vietnam, especially in areas where Chinese goods circumventing penalties of US by being shipped through Vietnam.