Outlook for 2011-15

• The Communist Party of Vietnam will keep a firm grip on power in the forecast period, and, despite signs of factional splits between conservative hardliners and reformers, there is no prospect of any major internal instability.
• Given the generally high level of political apathy, together with the regime's determination to crack down hard on pro-democracy activists, the likelihood that Vietnam will suffer an upheaval similar to that in the Arab world is low.
• Policymakers have embarked on a process of tightening economic policy, but concerns persist over whether there is sufficient political will to implement tougher measures that may be needed to stabilise the economy.
• Real GDP growth in Vietnam is expected to average 7.1% a year in the forecast period, underpinned by strong growth in consumption, investment and exports. However, this forecast is subject to downside risks.
• Inflation will accelerate to an average rate of 14.9% in 2011, before slowing to an average of 7.9% a year in 2012-15. Policymakers are likely to face an ongoing battle to keep the dong stable against the US dollar.
• The current account will remain in deficit over the next five years, but capital and financial inflows (including official foreign borrowing) will increase from the low levels that they reached in 2009.

Monthly review

• The authorities have stepped up their efforts to curb the political impact from the country's economic problems. They have increasingly been detaining protesters and have brought fresh charges against dissidents.
• Widespread concerns have been voiced about Vietnam's nuclear-power programme in the aftermath of the earthquake and tsunami that devastated north-eastern Japan on March 11th.
• Policymakers in Vietnam have been taking more steps to slow credit growth and inflation, mainly by raising policy interest rates.
• In recent weeks the authorities have begun cracking down on unofficial trade in US dollars by enforcing long-standing but frequently ignored laws prohibiting the use of the US currency for everyday business.
• Economic growth slowed in the first quarter of 2011, with the pace of year-on-year expansion falling to 5.4%-the slowest pace since the first quarter of 2009.
• Vietnam's twin problems of rising inflation and a widening trade deficit intensified in March. Inflation poses the more immediate problem, with consumer prices rising by 13.9% year on year in March.