Twin Deficits in Vietnam: Signs of Return and Some Recommendations

Nguyen Lan Anh

doi:10.57110/vnujeb.v3i2.167

Keywords:

Twin deficits, current account, the government, Vietnam

Abstract

When a country’s current account and government budget run into deficits at the same time, the country’s economy falls into a twin deficit. The current account surplus since 2011 has helped Vietnam temporarily get rid of a twin deficit continuously for many years. The appearance of a scattered current account deficit from 2015 to now signals the possibility of a return of a twin deficit. This is seen more clearly when analyzing the imbalance of savings and investment, economic crisis and exchange rate movements in the market. The paper makes a number of policy recommendations to prevent the return of a double deficit, limit its negative effects, and promote macroeconomic stability in Vietnam.

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