On October 11, 2018, Governor Le Minh Hung of the State Bank of Vietnam (SBV) attended the IMF/WB Joint Meeting of the Southeast Asian Central Bank Governors in the framework of the IMF/WB 2018 Annual Meetings in Bali, Indonesia.
Attending the meeting were Central Bank Governors and Finance Ministers from the IMF’s and WB’s member countries in Southeast Asia. At the meeting, Mr. Juda Agung, Executive Director of the IMF’s Southeast Asia Group Office, made a brief presentation on the Asian Economic Outlook. Accordingly, the global economy is still growing well but the growth is slowing down and uneven across countries. The global economic outlook is facing such risks and challenges as trade tensions, depreciated currencies in many developing and emerging countries, the global capital flows under pressure,... The IMF forecast the economic growth in Southeast Asian economies may be affected by the risks of a slowdown due to the instability in the financial systems and structural constraints. It is recommended that policy makers should consolidate the buffer zone and improve the resilience of the financial systems and strengthen the role of the multilateral institutions and systems.
Discussing the issue regarding trade tensions and their impacts on Southeast Asian countries, the IMF and the World Bank economists also said that those countries would be adversely affected by trade tensions between the United States and China. Exports in the region are affected due to the dependence on the Chinese market, which accounts for over 20% of Southeast Asia's total exports, while the demand in China declined because of the trade conflict with the United States. Therefore, they recommended that Southeast Asian countries strengthen their integration, complete and implement the FTA agreements such as CPTPP, EVFTA, RCEP,... as well as strengthen the economy's resilience.
Central Bank Governors and Finance Ministers from Southeast Asian countries
For Vietnam, the delegates assessed that the trade tensions and trade protectionist policies of the US will also affect Vietnam’s import-export activities in the context of the United States as the largest export market and China as the largest import market. The delegates also spoke highly of the stability in Vietnam’s money and forex markets while the exchange rates in many developing countries are under great pressures. In the context of unexpected developments of the trade tensions, the Finance Ministers and Central Bank Governors of South East Asia Group agreed to promote regional integration and linkages, strengthen policy coordination and information exchange. At the same time, they called on the IMF and the WB to assist in forecasting the developments of the trade tensions, as well as connecting the member countries to take appropriate policy responses, improving the basic conditions to support the economies’ resilience, strengthening the attractiveness of the business environment, and enhancing the competitiveness to attract new funds for economic development.
Le Hang