By Martin Gøttske
Vietnam is Asia’s newest tiger economy. The country has more than doubled its GDP over the past eight years, becoming a high performer in the world’s fastest-growing region. But the massive growth comes with a cost. Vietnam’s financing needs are growing rapidly, and official financing will not be enough to meet the development needs of the country. And at the same time, the country is now well-enough off to be disqualified from getting development funding from international institutions on a “concessional” basis at well below market rates.
As the discounted funding rolls off, Vietnam will need to turn more to the bond market and an increasing share of the financing will have to be mobilized from capital markets.