Vietnam economy expands at fastest pace in five years

Thien Thanh Sanitaryware joint company

Vietnam economy expands at fastest pace in five years

Vietnam’s economy has expanded at a speed of 6.68 percent in 2015, the fastest rate during the period 2011-2015, according to the General Statistics Office (GSO).

At a press conference releasing 2015 economic data in Hanoi on December 26, Director of the GSO Tran Bich Lam said the rate exceeded the goal of 6.2 percent set by the National Assembly and was much higher than the figures of 2014 (5.98 percent) and 2013 (5.42 percent).

Lam said the stable macro-economy, a 10-year low inflation, high confidence index and key industries’ good growth are highlights of the economy in 2015.

Pham Dinh Thuy, Head of the Industrial Statistics Department, said in 2015 some industries showed signs of strong recovery and the entire industrial sector’s production index increased 9.8 percent in comparison with 2014, higher that the level of 7.6 percent in 2014.

The processing and manufacturing industry’s inventory index as of December 1, 2015 rose 9.5 percent compared with 2014, lower than the 10.2 percent and 10 percent increases seen in 2013 and 2014, respectively.

The average consumer price index for 2015 upped only 0.63 percent from the 2014 figure, the lowest level in 14 years.

The inflow of foreign direct investment (FDI) as of December 15 saw a 12.5 percent year-on-year increase with 22.76 billion USD pouring into both new and existing projects. The number of new projects went up 26.8 percent to 2,013 with a total registered capital of 15.58 billion USD, a drop of 0.4 percent.

FDI disbursement also rose 17.4 percent, equal to 14.5 billion USD.

Despite experiencing some difficulties, Vietnam’s export value increased 8.1 percent to reach 162.4 billion USD, while import value was 165.6 billion USD.

The country also saw the establishment of 94,754 new businesses in the year with a combined capital of 601 trillion VND, up 26.6 percent in terms of the number of businesses and 39.1 percent in terms of capital from 2014.

Despite impressive results in 2015, Lam said the country will face more challenges than advantages in 2016, especially if the oil price goes down to 30 USD per barrel.
Le Thi Minh Thuy, Head of the Trade and Service Statistics Department, said if the electricity price is adjusted up, the CPI and production costs will go up, affecting economic growth.

She added that the exchange rate policy has been carried out relatively flexibly but it is facing pressure from external factors like the FED’s interest rate increase, market psychology and trade deficit.

The implementation of free trade agreements will also put more pressure on the economy, especially domestic businesses while bad debt has not been tackled completely.

According to the GSO General Director, the government, ministries and localities, business communities and the whole society will have to be proactive and flexible to overcome difficulties for achieving social-economic goals.

Vietnam’s 2016 social-economic goals include an economic growth of 6.7 percent, an inflation rate of under five percent; an export growth of 10 percent and a trade deficit of less than five percent of total export value.-VNA