Thailand should learn 'bitter lesson' from Vietnam, says central bank

BANGKOK, June 12 (TNA) – Thailand should be prepared to learn a bitter lesson its neighboring Vietnam had got from a short-lived and unsteady economic boom boosted by an inflow of foreign capital in large amount, according to the Bank of Thailand (BoT).
Amara Sripayak, senior director of BoT's Local Economy Division, said the Vietnamese economy had grown rapidly since foreign investors brought a huge amount of capital to invest in the country.
It resulted in the short-lived and unstable economic growth in the country.
The situation ended with the country experiencing such a serious economic plunge that the Vietnamese government was forced to devalue the currency by more than 2 per cent and raise the interest rate by 2 per cent to 14 per cent to rein in the incessant upward push of inflation -- up to 25 per cent at the present, she said.
"What happened in Vietnam underlines the fact that although the economy has grown impressively with a significant foreign capital inflow, the capital could always flow out if the economic expansion is unstable.
"So, we should learn the lesson that it is vital to maintain economic stability," she said.
Mrs. Amara said she viewed the economic crisis in Vietnam might affect investor confidence in the region. However, it is necessary to continue to assess the repercussions.
The BoT executive said she did not believe Thailand would experience a similar problem because the country had not experienced the current account deficit and its international reserves have stayed high.