Vietnam Economy Is Recovering

According to the report, Vietnam will exceed seven criteria and fulfil six criteria out of 14 socioeconomic development criteria set for 2015 by the lawmaking National Assembly. Particularly, the gross domestic product (GDP) is expected to climb 6.4 percent in 2015, higher than the target of 6.2 percent, while inflation estimated to rise by 1.5 - 2 percent, well below the target of 5 percent. Export growth is projected at 10 percent as expected while trade deficit is hoped to stand at 3.6 percent, lower than the initial objective of 5 percent.

 

Vietnam's economy is forecast to stage a continued recovery in the last four months. The growth will be propelled by a series of supporting factors like lower input prices, FDI companies, improved aggregate demand, stronger domestic purchasing power, and higher demand for exports.

 

However, emerging difficulties are dragging on the agro-forestry and fisheries sectors. The growth is forecast to stay low on lower prices of agricultural products in the world market and weak competitiveness of Vietnamese agricultural products.

 

Domestic enterprises, particularly small and medium-sized ones, will still have to struggle to compete on the market because of their low competitiveness. Unpredictable weather, natural disasters and disease outbreaks, if any, will certainly affect the country's economic growth in the last months of 2015.

 

The report clearly stated that it is vital to maintain macroeconomic stability, growth and economic development in a sustainable manner; accelerate the implementation of groundbreaking strategies and economic restructuring in couple with the transformation of growth pattern; enhance the effective competition in the context of deeper international economic integration; and achieve social security, social welfare and environmental protection objectives, strengthen national defence and security, and firmly safeguard national sovereignty.

 

The report anticipated major socioeconomic indicators in 2016. Specifically, GDP growth was estimated at 6.7 percent and exports were forecast to expand 10 percent over 2015. Trade deficit will be curbed at 5 percent of total exports and social development capital will account for at least 31 percent of GDP.

 

According to the Ministry of Planning and Investment, in 2016, State budget revenue is expected at VND980 trillion, while State budget expenditure is forecast at VND1,237 trillion (including VND257 trillion for development investment). Budget deficit is hoped at 5 percent of GDP.

 

The employment structure will be balanced among sectors and fields. The workforce in agriculture, forestry and fishery will account for 45 percent of the labour force, followed by services with 33.5 percent and construction and industry with 22 percent. Poverty rate will decline by 1.3-1.5 percent, and even 3- 4 percent in poor districts.

Exports are projected at US$182 billion in 2016, up 10 percent over 2015 and imports are estimated at US$188 billion, up 9.9 percent year on year. Trade deficit is thus hoped to stay within 5 percent of exports.

 

Electricity, a very hot topic in 2015, is seen to rise by 11 percent in 2016.

 

Vietnam's economy will maintain a steady recovery with a higher growth rate than in 2015," said the Ministry of Planning and Investment. However, difficulties and challenges to economic growth still loom large. The formation of the ASEAN Community by the end of 2015 and the conclusion and enforcement of free trade agreements (FTAs) will provide important conditions for development. Nevertheless, these also cause very huge difficulties and challenges in developing markets and enhancing competitiveness in domestic, regional and international markets.