Vietnam is expected to receive a good flow of international trade and witness vibrant changes in the economy in 2015. Even the most pessimistic person could see that 2015 is promised with clearly-seen driving forces for socio-economic development.
Momentum of 2014
Mr Vuong Dinh Hue, Head of the Party Central Committee’s Economic Commission kept a cautious positive attitude when commenting on the 2015 economic outlook, saying: “It is time to recover reasonable growth”.
Inflation was surprisingly low, only 1.84 percent for the whole year of 2014. Even more notably, its economy grew significantly at 5.98 percent. Consider 2014 a milestone for the economy to escape from the vicious cycle: growth – inflation – tightening – decrease – easing – growth – inflation. This is a “gift” for 2015, absolutely not “a burden” as judged by some sceptical comments.
Financial and currency markets were getting more stable, both deposit and lending interest rates decreased, especially lending rates declined dramatically compared with the previous period; VND exchange rate against USD was of little change and this provided a positive support for export and strengthened the market sentiment; the stock market was among five markets of strongest growth in the world; foreign exchange reserves increased considerably.
The economic restructuring made significant progress. The Central Economic Commission released a detailed report summarising the implementation of the policy of economic restructuring associated with the innovation of growth model. The National Assembly also had its own monitoring reports to assess this issue. Public investment began to prove efficient. In the 2006 – 2010 period, ICOR of the entire economy was 6.96. It’s estimated to decrease to 6.5 in the 2011 – 2015 period. This trend was even more pronounced in the public sector. If during 2006 – 2010, the average ICOR of the public sector was 9.6, by the time of 2011 – 2013 it had dropped to 7.5.
If Vietnam, with a population structure in the golden period and a potential market of over 90 million people, could learn to motivate the people and boost demand, there would be a strong incentive for economic development. The government has reaffirmed their political determination through the process of restructuring the state’s economic sector, so the private sector is standing before the opportunity for further development, creating a dynamic and youthful force to blow a new wind into the economy in 2015.
Opening for trade
2015 is a milestone year marked by the deployment of many free trade agreements. Together with agreements expected to be signed early 2015, Vietnam has ten free trade agreements with other countries and territories.
With the Vietnam-Korea Free Trade Agreement expected be signed in early 2015, the two countries aim for a US$70-billion two-way trade by 2020, and this presents a big opportunity for businesses in both countries.
With the Free Trade Agreement between Vietnam and the Customs Union of Russia-Belarus-Kazakhstan (VCUFTA) that is about to be concluded, it’s estimated that Vietnam could boost its exports to Russia 63 percent, to Belarus 41 percent and to Kazakhstan 8 percent.
For the whole Union, after the FTA comes into force, at least 80 percent of Vietnam’s products going into this market will be exempt from tax.
Vietnam is also participating in negotiations of new generation free trade agreements of high standards with major powers and economic bloc in the world such as the US, EU, Russia, Japan and Australia.
In 2015, Vietnam will officially be part of the ASEAN Economic Community.
All these events of international integration will create an important impetus for the growth of trade and investment, thereby promoting economic growth, improving the quality of international economic integration of Vietnam.
Deep integration brings both opportunities and challenges, creating important impetus for the growth of trade and investment, thereby promoting economic growth, improving the quality of international economic integration of Vietnam. At the signing of the Memorandum on Conclusion of the Vietnam – Korea Free Trade Agreement Negotiation, Prime Minister Nguyen Tan Dung said: “From the first overall look, for the completion of all 14 FTA in the upcoming time, Vietnam’s legal and business environment will change dramatically and fundamentally, more convenient but also more competitive”.
Vietnam will become an important link of the big economic network with 55 partners, including 15 members of the G-20. This will open up opportunities for foreign businesses to come to Vietnam to invest, to export goods and services to other partners of Vietnam with a low tariff and technical barriers removed. Vietnam will become an important gateway for investors to access the ASEAN market and even to all EU countries and the United States, benefiting with incentives under FTAs.
Khanh An
Đăng ký: VietNam News
