Key Findings from Taking Stock - an update on Vietnam's recent economic developments (December 2012)
While Vietnam is enjoying relatively stable macroeconomic conditions, its economy is slowing down in absence of tangible progress on the restructuring agenda.
• Vietnam’s economy is projected to grow at 5.2 percent in 2012, its slowest growth rate in a decade. The economy is expected to recover to 5.5 percent in 2013.
• The year-on-year inflation fell from 23 percent in August 2011 to 7 percent in November 2012. Sectors where prices administratively controlled –health and medical services, energy, education and transport -- have experienced higher and more volatile inflation than those sectors where prices are determined mostly by market forces.
• Total export turnover between January and October 2012 is estimated at $93.5 billion, an increase of 18.4 percent from the same period last year. In 2012, Vietnam is expected to record the highest rate of export growth among developing East Asia.
• Imports have slowed down significantly given the sluggish growth. Import spending in the year to October is estimated at $93.8 billion, up 6.8 percent compared to 26 percent in the same period of 2011.
• Vietnam is expected to post its largest ever trade and current account surpluses. The trade deficit was only 0.4 percent of GDP in 2011 and is expected to increase to a surplus of 4.7 percent in 2012.
• The current account balance has improved, from a huge deficit of 11.9 percent of GDP in 2008 to a minor surplus of 0.2 percent in 2011 and is projected to report a record surplus of 2.7 percent in 2012.
• Revenue in the first three quarters declined by 0.6 percent compared to the same period last year, however, government expenditure has remained on track.
• Inefficiencies in state-owned enterprises, banks, and public investments have pulled down Vietnam’s long-term growth potential. The government has prioritized reforms in these areas, but progress needs to accelerate.
