Vietnam Economy & Industry Overview

Vietnam’s economy maintained its growth in June and the first half of 2008 as a whole despite impacts from inflation, price fluctuation, bad weather, and diseases. Last month many representatives from ministries, agencies, localities and corporations agreed that the GDP growth rate of 6.5 percent recorded in the past six months was a success, creating an impulse to obtain the growth of 7 percent in the remaining months of this year. The trade deficit saw a slowdown in June but the total of the past six months still counted at 14.7 billion USD, or nearly half of the export turnover and higher than the figure of 2007.

Other positive signals from the economy included the slowdown increase of the consumer price index (CPI) in June, which was estimated at 2.14 percent, much lower than the May record of 3.91 percent. The foreign direct investment (FDI) attraction in the past six months also set a record of 31.6 billion USD, outdistancing the 2007 figure of 21.3 billion USD. - Source: Vietnam News Agency, 27/06/2008

The Prime Minister made the statement at a meeting with JP Morgan chief economist David Fernandez on June 5 to discuss issues of great concerns by foreign investors such as investment capital control, foreign exchange policy, current account, foreign currency reserve and deposits by local people. The value of the dong will be decided by market supply and demand and though the market is under pressure, Vietnam still had a surplus of US$1 billion in its current account during the first five months of this year, Mr Nguyen Tan Dung - VN Prime Minister - stressed. The Prime Minister also rejected forecasts in foreign markets that the dong will be devalued by 20-40%, saying that these predictions were groundless. With it current foreign currency reserve, Vietnam is totally capable of ensuring normal transferring of foreign currency by foreign investors, Mr Dung said. Vietnam would soon make public its foreign exchange reserves in dollars, the prime minister stressed. These information had before only been provided to international organisations such as the World Bank.
Vietnam has no plans to devalue the dong within the current context of current account and the current general economic situation, affirmed Prime Minister Nguyen Tan Dung. - Source: The People, 07/06/2008

Vietnamese inflation accelerated to 25.2% in May [2008], the fastest since 1992, driven by record rice and energy prices, according to a statement released by the General Statistics Office in Hanoi today [27 May 2008]. Food costs have been the primary culprit for faster inflation, underpinned by surging international prices of rice, of which Vietnam was the third-biggest exporter and fifth-biggest consumer last year [2007]. Prices in the food category including rice jumped 67.8% in May from a year earlier. To combat inflation Vietnamese authorities have told banks to cut lending, put in place some price controls and instructed government agencies to halt non-essential construction projects. Last week the central bank raised its key interest rate to 12% from 8.75% and allowed banks to offer lending rates of up to 18%. Vietnam Ministry of Finance has proposed that the government provide further compensation to oil and gas companies to sell petrol at prices below market rates.

In the long run, it is never a good idea for governments to subsidize petrol or diesel prices. Eventually rising crude oil prices will put an increasingly heavy burden on the government and cause the budget to run into a deficit, or worsen existing deficits. On the inflationary front, it also didn't help that food prices, especially rice, have been on an uptrend in the past years. A CPI inflation rate of 25.2% is very high - if it goes any higher it would be heading into hyperinflationary territory. - Source: Bloomgberg, Post One, 03/06/2008

In the first 5 months, total FDI capital has reached 14.7 billion USD (increase 2.6 time year on year). In May, there are more 130 licensed project with 7.5 billion USD investment capital. This is the record of Vietnam in FDI.- Source: VTIC, 26/05/2008

Vietnam Industry Output: Actual vs Target 2008

(Source: MOIT, GSO.VN)  This actual data is up to Apr.2008

Update Industrial Output for Jan - Apr.2008

Total country industrial output in the first 4 months has achieved (13.5 billion USD) 215,543 billion VND (+16.4 % year on year), in which central state-enterprises raise 10.7% yoy, local state-enterprises - 0.6% yoy, non-state-enterprises +22.1 %, foreign investment enterprises + 16.8%.

Vietnam Industry Review 2007

Total industry output of year 2007 is 574,047 billion VND (+17.1 % year on year), in which: SOEs + 10.3% year on year and accounts 24% of total country industry output, Non-SOEs +20.9%yoy acc. 36.9%, FIEs +21.3%yoy acc. 39.1%.

Industries have achieved the high growth rate (over target), like: car manufacturing +52.2%, motomobike manufacturing + 19.2%, machine tools +69.8%, transformer + 17%, air-conditioner + 51.9%, washing machine manufacturing +21.3%, electricity fan + 18.6%, electricity +13.2%, steel +10.8%, clean coal +11.5%, cement +11.8%, seafood processing +12.6%, kraft paper +15.3%....

VIETNAM INDUSTRIAL ZONES REVIEW

DOMESTICS INDUSTRIAL OUTPUT IN FIRST TEN MONTHS-2007

INDUSTRIAL OUTPUT CONTRIBUTION BY ECONOMIC SECTORS IN Q1-2007

VIETNAM INDUSTRIAL OUTPUT FROM 2005 TO 2010 (Planned 2006)

VIETNAM INDUSTRIAL OUTPUT FROM 2005 TO 2010 (Planned 2004)