Thailand’s ghosts of 1997 hold growth lessons for Hanoi
Countries can afford to miss growth targets but cannot afford a banking system weighed down by bad loans. Thailand suffered from this 30 years back and Vietnam should take note.
Sign up now: Get ST's newsletters delivered to your inbox
Workers craft jewellery at Pandora’s new manufacturing plant in Ho Chi Minh City. Vietnam can afford a slower-growing economy but not a banking system under stress, says the writer.
PHOTO: AFP
Ramkishen S. Rajan
The International Monetary Fund (IMF) and World Bank annual meetings have returned to Bangkok, 35 years after the city last hosted them. In 1991, Thailand was one of Asia’s most admired economies. Six years later, the collapse of the baht set off a regional financial crisis.
Vietnam’s rapid growth gives that history renewed relevance. Its economy is now approaching Thailand’s in size at market exchange rates. Real gross domestic product (GDP) expanded by just over 8% in 2025, close to Thailand’s average annual growth of 8.3% from 1990 to 1996.