VietNamNet Bridge - 2015 is still a difficult year for the Vietnam economy. However, there have been signs of recovery.

Despite the sharp oil price fall, Vietnam still can gain a 5-year high GDP growth rate of 6.5 percent, which is higher than the targeted 6.2 percent set earlier this year.

1. Despite the sharp oil price fall, Vietnam still can gain a 5-year high GDP growth rate of 6.5 percent, which is higher than the targeted 6.2 percent set earlier this year. 

The 6.7 percent GDP growth rate for 2016 suggested by the government has been approved by the National Assembly.

Meanwhile, the CPI in 2015 was below 2 percent, much lower than the 5 percent predicted by the government. 

2. On October 5, 2015, Vietnam and 11 partners completed the negotiations for TPP, considered the trade deal of the 21st century which sets new high standards for global trade.

Joining the large playing field as a founding member, Vietnam is believed to have great opportunities to grow more rapidly. However, it has been warned that as the least developed country among TPP members, it would meet a lot of challenges.

2015 is still a difficult year for the Vietnam economy. However, there have been signs of recovery.

3. Vietnam has jumped three spots in the WB’s Doing Business 2016 report, ranking 90th among 189 economies in the world.

The report recognizes Vietnam’s big efforts in cutting the numbers of hours businesses have to spend on tax procedures and creating favorable conditions for businesses to join the market. 

Vietnam has gained higher positions in some other indexes, including the power approach (from130th to 108th) and credit access (from 36th to 28th).

4. As the crude oil price has fallen dramatically in the world market, the state budget’s revenue from oil exports have decreased considerably. 

Meanwhile, economists repeatedly warn about the rapid public debt increase. It is estimated that the public debt has reached 61.3 percent of GDP, higher than the 59.6 percent in 2014. This means that the public debt increased rapidly by 20 percent in the last five years. 

In 2015, the government had to borrow VND125 trillion to swap debts.

5. The Chinese reminbi 4.6 percent devaluation in August forced Vietnam to adjust the dong/dollar exchange rate twice in 2015 and widen the trading band to +/- 5 percent.

The dollar price has increased sharply since then. On the black market, the dollar once hit the VND22,950 per dollar threshold.

6. Vietnam still is undecided about its strategy on developing an automobile industry.

On October 6, 2015, the government submitted to the government a plan on adjusting luxury tax on automobiles, aiming to encourage the production of small-size cars.

Just ten days later, the government submitted a new plan, but it was not approved.

The third draft version is being compiled by the Ministry of Finance.

7. Vietnam has been undergoing a Vietnam-style bank restructuring process under which some weak banks have been bought by the State Bank for zero dong. Meanwhile, some other weak banks have merged with other banks.

To date, nine banks have been merged with others, and four others have been taken over.

8. In 2015, the government allowed the State Capital Investment Corporation (SCIC) to withdraw the state’s capital from 10 big enterprises, including FPT and Vinamilk.


VNN