Viet Nam Human Rights
Positive signs in Vietnamese economy in first half of 2015
29/7/15
While
the world economy struggles to recover against the backdrop of crises, conflicts and diseases, Vietnam’s economy 2014 serves
as a silver lining highlighted by numerous economic indices topping the average
growth of other emerging countries in the region. Vietnam’s economy has strengthened
at a gradual and sustained pace with significantly better macroeconomic indicators.
The economy developed at 5.62% in 2014, inflation was kept under control,
business and manufacturing sectors improve. Exports are showing positive trends.
The
WB report said that in the first half of 2015 Vietnam’s economy rebounded with a
GDP growth of 6.28%, the highest rate in 5 years. WB experts predict Vietnamese
economic growth of 6 to 6.2%, due to the recovery of domestic demand and an
increase in personal investment and consumption. Inflation is estimated at 2.5%
and current account is positive at 0.5% of GDP. The budget deficit will be
reduced by efforts to cut expenses.
Sebastian
Eckardt, a WB senior economist, said: “Vietnam is probably of the fast
growing economies regionally and internationally. Vietnam expects a growth by the end
of the year and our baseline assessment is at 6%. But the recovery maintains a
momentum and possibly exceeds 6%. The unbalanced trade could impact trace
account but because of the strong and resilient remittances, we expect curtain
surplus by the end of the year. Fiscal deficit in line with government targets,
we expect that public debt will continue the upward trend but remain below the
current 75% of GDP.”
In
the first four months of 2015, the index of industrial production posted a
strong rise, at 9.4% compared with 5.5% in the same period of 2014. The
inventory index of the manufacturing sector rose 11.3% compared with the 13.9%
rise as of April 1, 2014. Total retail sales and consumer services, excluding
seasonal factors, rose by 8%. Passenger and freight transport volume increased
steadily.
Almost
every field of Vietnam’s
economy witnessed positive rebound. Vietnamese stock market stands among top
five fastest-growing markets in the world, with VN index and HNX index up by
19.9% and 30.4% respectively. Transaction volume in the housing market doubled
over the same period last year, easing up a substantial amount of property
inventories. Vietnam
enjoyed trade surplus, a steady growth in FDI, ODA. Vietnam also performed well in
ensuring social security, creating a good example in fulfilling the millennium
development goals of the United Nations. Vietnamese investment and business
climate continues to be enhanced and become more attractive to foreign
investors. In recent years, there have been notable trends of multinationals,
including Samsung and Nokia moving their business from China and Thailand
into Vietnam
subsequently triggered a new influx of smaller businesses.
Vietnam ranks second as most
attractive nation in ASEAN for the US
businesses, according to a survey by the U.S. Chamber of Commerce in Singapore.
Moody’s Investors Service upgraded the ratings of Vietnam’s senior unsecured bond
from B1 to B2 with a stable trajectory. Fitch Ratings has also raised Vietnam’s
long-term Foreign and Local Currency Issuer Default Ratings to “BB-” from “B+”,
citing improvements in the economy and stronger finances. Financial agencies
including WB, ADB, HSBC, S&P, Moody’s, Ernst & Young forecast Vietnam
GDP would grow from 5.4-5.6% in 2014 to 6% and 6%-7% in 2015 and between
2016-2017 respectively, well beyond the average growth of other emerging
economies.
Such
achievements are attributable to the master plan to restructure the economy by
Vietnamese Government. The restructuring process is primarily aimed at building
a modern market economy which integrates successfully into the global economy,
laying foundations for an overhaul of the sectors of investment, banking, and
state-owned enterprises (SOEs). The restructuring process has so far received consensus
of the policymakers, analysts and businesses.
In
addition to economic reform, Vietnam
accelerates its international integration via a number of cooperation
mechanisms, including ASEAN Free Trade Agreement (FTA), Regional Comprehensive
Economic Partnership (RCEP), Trans Pacific Partnership (TPP) and Customs Union
of Russia, Belarus, Kazakhstan, to which Vietnam has undertaken reform to
accord. Vietnam’s
integration into the world economy, especially its cooperation with EU and the US in a broad
framework has fagged up its potential in the eyes of foreign investors.
Vietnam has beefed up its
efforts in infrastructure development, educational reform, revamping
administrative procedures to create incentives for both domestic and foreign
investors.
Nevertheless,
Vietnam’s economy are still heavily dependent on foreign-owned enterprises
which accounts for around 70% of national exports, crimped by the
inefficiencies of SOEs who are supposed to be the driving force of the economy
but are performing poorly in technology innovation and R&D. Bad debt has
not been resolved while the stock in real estate and processing and
manufacturing sector remains high. Public debt soars, while the economic
restructuring, especially in the state sector is implemented at a snail’s pace.
Overall,
the outlook for the Vietnamese economy is positive, but a more comprehensive
effort is needed. According to the Asia Development Bank, Vietnam’s
economy is expected to grow by 6.1% in 2015 and 6.2% in 2016, compared with
ASEAN’s average growth rates of 4.9% and 5.3% in 2015 and 2016 respectively.
Inflation is expected at 2.5% in 2015 and 4% in 2016. However, the current
account surplus will narrow from 3.1% of GDP in 2015 to 1.5% of GDP in 2016.
Meanwhile according to an ANZ report released on April 17, Vietnam’s GDP
growth in 2015 and 2016 will reach 6.5%, or even higher given positive results
in the first months of the year.
Though
there remain interior difficulties and challenges from political and economic
fluctuations worldwide, Vietnam’s
economy, with positive signs, is expected to grow steadily. Given determined
and resolute policies of the Government, the economic restructuring process
will be accelerated, creating a momentum for the long-term and sustained
development, ensuring a bright prospect for the economy of Vietnam./.
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All comments [ 5 ]
those are results of issueing and implementing the proper policies by the Vietnamese Goverment
that's right, while many economies is facing difficulties, Vietnam's economy is steadily growing up.
many international organizations like WB, ADB have highly evaluated the development of the Vietnamese economy.
with the positive signs in the economy, Vietnam is attracting more foreign investors that believe the bright future of their doing bussiness in Vietnam
Vietnamese Goverment offers many favourable conditions to foreign investors that makes them more trustful, peacefulness and feel comfortable when investing in Vietnam
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