Vietnam Economy Creating Growth Momentums

Vietnam’s GDP was expected to climb 6.2 percent in 2015. But, according to many specialists, the growth may reach 6.5 percent in the year.

 

At the opening session of the 9th Plenary Session of the 13^th National Assembly, Deputy Prime Minister Nguyen Xuan Phuc confirmed that Vietnam economy saw the growing recovery from 2014. In 2015, the economic performance has been better in the first months, featured by the first quarter GDP growth of 6.03 percent, the highest in five years. Consumer price index (CPI) rose 0.04 percent in April, the lowest in many years. Market management was effective, with many key commodities like petroleum regulated according to market rules.

 

Although there were worrying forecasts that the sharp fall in crude oil prices would affect State budget revenue, the budget collection still increased on industrial production outperformance and solid-growing consumption. Domestic budget revenues rose 17 percent year on year to from VND238.7 trillion in the first four months, bringing gross State budget revenue to VND314.1 trillion in the period, equal to 34.5 percent of the full-year estimation and up 9.4 percent year on year.

 

State budget expenditure stayed tuned to estimations. The total expenditure reached VND94.75 trillion in April 2015, totalling VND362.7 trillion in the first four months, equal to 31.6 percent of full-year estimations and up 9.5 percent against the same period of 2014.

 

Maintained macroeconomic stability and improved business confidence are providing the foundation for lowering government bond yields. The State Treasury issued VND62,370 billion worth of bonds as of April 20, 2015, a decrease of VND10,784 billion (15 percent) from the same period of 2014.

 

Credit also grew in the first months. More credit had been pumped into priority sectors and fields. The liquidity of the banking system stabilised. Deposit value reached VND4,000,438 billion in the January-April period, just 0.02 percent lower than a year-ago period.

 

According to a statistical report on over 300 listed companies by Viet Dragon Securities Company, listed companies fared well in the first quarter. Over 60 percent of listed firms reported revenue and profit growth. Some 20 percent of enterprises posted revenue and profit growth of over 25 percent, led by construction, real estate, services and mining industries.

 

However, in spite of positive performances in the early 2015, the Vietnam economy is being posed to numerous challenges, including unsustainable growth, slowing agricultural and fishery growth, and service sector in hardship.

 

According to Dr Cao Sy Kiem, to go beyond difficulties and develop solidly, Vietnam's economy must endeavour to complete the targets set for 2015 in the following months, improve the investment climate, remove production difficulties and promote growth. Vietnam must coordinate monetary policy, fiscal policy and other policies to ensure macroeconomic stability and economic balance while regulating interest rates in line with inflation development.

 

Economic expert Vu Vinh Phu said that Vietnam needs to focus on agricultural development to increase the value of agricultural production. To do this, it must have really effective agricultural and rural development policies to boost sales and build up brand names in both domestic and international markets.

 

In addition, to mobilise resources for development investment, especially after free trade agreements going into force, Vietnam should seek to expand export markets, boost exports and develop brand names on international markets. It also needs to continue with its current policies on regulating prices of essential commodities (electricity, water, health, education, etc) towards market rules.