Economy of Vietnam registers growth

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After a certain crisis-ridden period of time in Vietnam’s economy, there are indications that Vietnam’s economy is slowly escaping this difficulties whereas the other economies of the emerging countries in this area are affected by slowing growth of China. Recent statistics a certain growth in key economic indicators like export what leads to the conclusion that Vietnam’s economy is flourishing. One example for growth in Vietnam is the car industry. Compared to last year, the car market could register an increase of about 25% in July in the same period of time. Also disbursement of foreign direct investment (FDI) which mostly came from high-tech companies, increased 6.4% compared to the same period of the last year. Furthermore, after the Vietnamese Government established bad-debt sale companies to restructure the banking system, there was a credit growth to register whereby the banking credit capital increased 5.15% in the first seven months after a slow growth rate in the first three months of the year. It seems that this positive changes attract investors’ attentions. So the VN-Index has increased 20% early year till now what makes Vietnam becoming one of the securities markets increasing most dramatically in Asia whereas the other economies of countries in the same area, like for example Thailand, are struggling to achieve at least a small growth rate.

However, Vietnam’s economy still remains many problems to be solved. The Government is trying to blow a new vitality into the housing-landing market and construction after the recent decline. The Real estate bubble “deflated” what is believed to be the main reason of a surge of bad-debt in the banking system.

However, positive economic signals bring to optimism that Vietnam – used to be proposed to one of the brightly prospective economies in Asia – can finally come back the right path. The Vietnam Asset Management Center (VAMC) is preparing to buy the first bad debts and the Government starts to unveil loan package worth 1.4 billion USD to support real estate projects for lower-income people. In general, the Vietnamese economy is showing many stable signs. The GDP increased 5% in the second quarter compared to a growth rate 4.8% in last year’s same period. Officials and economic specialists have predicted that faster growth could be achieved in the near future. So for the coming time, foreign investors will be encouraged to pour even more capital into Vietnam. The Government considers to increase the foreign ownership rates in companies listed on the stock market up to 59% from 49%. This plan has the potential to attract great attentions in the Vietnamese stock market and thereby to boost the economy.

ANT Consulting

(Source: Wall Street Journal/Vneconomy)

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