Vietnam economy grows at highest rate in 5 years
Vietnam’s economy in 2015 grew at its fastest pace in five years, official figures showed yesterday, shaking off regional economic worries with strong exports, record foreign investment and buoyant domestic consumption. The communist nation recorded a GDP growth rate of 6.68 percent, easily surpassing the government’s 6.2 percent target with a figure that looks set to be one of Southeast Asia’s strongest showings for the year.
“This growth rate is very important for the Vietnamese economy in the coming years in the context of falling world oil prices and instabilities in the international financial markets,” Nguyen Bich Lam, director of the General Statistics Office, told reporters in Hanoi. Many Asian economies have been rattled by troubles in China, where the world’s second largest economy has suffered with its worst annual growth rates in a quarter of a century.
While regional neighbors like Thailand have suffered, Vietnam has proved resistant to the slowdown of its giant northern neighbor, partly through state intervention. The State Bank of Vietnam weakened the dong three times this year to spur exports after China depreciated the yuan, dragging exchange rates lower across Asia. Exports rose 8.1 percent in the 12 months through December while imports climbed 12 percent. Much of the growth has been fuelled by a flurry of international interest with disbursed foreign investment surging 17.4 percent compared to last year with a record-high of $14.5 billion.
The strong showing is a significant jump on the last two years. In 2014 Vietnam’s GDP growth was just under six percent, while that of 2013 was only 5.42 percent. Senior economist Le Dang Doanh said that strong industrial growth also helped boost the economy as well as “lower oil prices in the world market which has greatly reduced the cost of imported raw materials for Vietnam”. On Wednesday, Vietnam released data showing an annual inflation rate of just 0.63 percent in 2015, the lowest in 14 years. Vietnam is now party to the recently sealed Trans-Pacific Partnership, the world’s largest free trade deal between 12 nations, including the US and Japan.
As the poorest of the TPP nations, the pact is something of a coup for the country’s Communist rulers, who will meet in January for a major gathering of senior officials to chose new leaders and decide the country’s five-year economic plan. In a report earlier this month the World Bank said the TPP deal could add “as much as eight percent to Vietnam’s GDP... over the next 20 years” if it goes ahead. But many analysts still say Vietnam’s economic progress is vulnerable due to high public debts, inefficient operation of huge stateowned enterprises and rampant official corruption. For decades, the country suffered from runaway inflation-with triple digit increases in the 1980s and rates as high as 28.3 percent as recently as August 2008. — AFP