Abstract
The country is changing economic tack for 2009, moving away from fighting
inflation to attempting to
stimulate growth. We highlighted in our Q109
report that the almost overheated activity witnessed in the
infrastructure
sector in H108 was replaced by a sudden plunge in demand and subsequent prices
of raw
materials in Q408.
In BMI’s Q209 Vietnam Infrastructure
Report we have made a significant revision in our forecasts for
Vietnam
for 2008 onwards. In anticipation of much slower growth, we now see the
VND124tn industry
value we were forecasting to come in 2009 to materialise
instead between 2010-2011. Our medium term
view of strong growth remains
unchanged. The county has significant projects in the pipeline for
building
and upgrading infrastructure that should sustain the industry. We
believe that growth will pick up in 2010
and significantly accelerate in
2011 onwards. New preliminary estimates from the national statistics
agency indicate that the construction industry value real growth for 2008 was
a mere 0.4%. Given that the
macroeconomic outlook is bleaker for 2009, we
have revised our real growth forecasts for 2009 to 0.1%.
We have also
introduced our new Project Finance ratings for the Asia Pacific region in an
effort to
provide a globally-comparative, numerically-based assessment of
the breadth and depth of risks facing
major infrastructure projects, which
will in turn affect the source, availability and cost of finance. In spite
of half a decade of impressive infrastructure development, Vietnam has some
deep structural problems
which decrease the country’s overall score
and raise the risk premium for project finance operations.
The transport
sector has witnessed the largest degree of activity in 2008 and has the
largest number of
projects in the pipeline for 2009. The ports sector has
been particularly attractive for private investors,
responding to the
government’s calls for greater participation in developing
Vietnam’s maritime hubs. In
the roads sector, significant
opportunities are opening up for construction and infrastructure players,
as
the government’s plans to build expressways and secondary road
networks is buttressed by loans and
official development assistance from
multilateral institutions.
In an announcement contradicting earlier
claims, Electricity of Vietnam said that it will implement a
multibillion
dollar capital expenditure programme in 2009, despite having given up projects
earlier citing
financing concerns. The first quarter of 2009 saw greater
penetration of the private sector in the utilities
market with new
multibillion dollar power generation (IPP) projects announced by US-based AES
and
Malaysia’s Janakuasa. BMI has maintained that private sector
participation is pivotal for addressing
Vietnam’s long term power
generation shortfall.
| 
View Cart
