We recently met with government officials in Hanoi to discuss the economic outlook for Vietnam. The conclusion is that the economic picture remains unsettled. The trade deficit looks better, the dong remains stable and inflation has come down, but these may merely be reflecting the slowdown in the real economy. The budget deficit may end the year at 5-5.5% of GDP, but this does not give the government much leeway to support the banks in dealing with their NPLs.