1. VIETNAMESE ECONOMIC ISSUES
HCM City, June 14th 2013
Nguyễn Hồng Thắng, UEH

2. Outline Vietnamese Economic Issues GDP & Inflation Investment
Foreign Trade
State Budget
Economic forecasting in short-term
GDP
Inflation
Public Debt
State-owned enterprise
Economic Restructing

3. 1. Vietnamese Economic Issues

4. GDP Growth & Inflation (%)
Source: Vietnam GSO

5. Inflation from Apr 2010 to Apr 2013
Source: Bích Diệp, Dân trí, 29/4/2013

6. GDP/capita from 2002 – 2012 (USD)
Source: Vietnam GSO

7. GDP/capita in some countries, 2011
USD
Source:

8. Foreign Investment (registered) from 2000 to 2012 (USD Mill)
Source: Vietnam GSO

9. Foreign Investment (registered and realized) from 2000 to 2012 (USD Mill)
Source: Vietnam GSO

10. Investment by countries (USD Mill), Dec 31th 2011
Japan
Others
Korea
United-States
Taiwan
Malaysia
Singapore
Hongkong
English Virgin
Source: Vietnam GSO

11. Import and Export to GDP (%)
Export/GDP
Import/GDP

12. Export goods by USD, 2010 Food and animal Other Manufacture
Drink, tobacco
Raw materials
Fuel, oil
Machine, spare part
Manufacture
Chemicals

13. Public Expenditure structure (%), 2010
Public Management
Economic service
Public Investment
Transfer Payment
Health service
Education
Social service

14. Public Investment/Total Public Exp.

15. From Foreign Investment Enterprise
Public Revenue structure (%), 2005
VAT on Import
Duty & Excise Tax
From SOE
From Foreign Investment Enterprise
From Non SOE
Oil
Personal Income Tax
Land Tax
Registeration Fee

16. From Foreign Investment Enterprise
Public Revenue structure (%), 2010
VAT on Import
From SOE
Duty & Excise Tax
From Foreign Investment Enterprise
Oil
From Non SOE
Land Tax
Personal Income Tax
Registeration Fee

17. 2. Economic Forecasting in Short-term (2013-2015)

18. Annual growth rate in GDP
1. The National Assembly: 5.5%
2. Three scenarios of the Vietnamese economists:
Poor: 5%
Normal: 6%
Positive: 7%

19. Inflation 1. The National Assembly: 8.0% 2. Other: ANZ Bank: 6% - 8%
HSBC: 6.3%

20. State Budget
Complying the aggregate fiscal disciplines and the restrained fiscal policy:
The state budget deficit: not over 4.8% GDP
The public expenditure: lower than 28% GDP
Tax revenue: 23% GDP

21. Public Debt Public Debt (domestic and foreign) includes:
Central Gov Debt
Local Gov Debt
Debt guaranteed by Central Gov
Not over 65% GDP in long-term

22. State-owned Enterprise
Going on the privatization of state-owned enterprise
Vietnamese economists recommend the Government not to develop the economy base on SOE.
 State-owned Groups are not the pillar of the economy.

23. Tax policy Cut the Business Tax Rate to 20%
Environment protection tax is an indirect tax which is applicable to the production and importation of certain goods deemed detrimental to the environment, the most significant of which are petroleum and coal.

24. Changing the Economic Models
3. Economic Restructing
Changing the Economic Models

25. Overall Target
Association with the conversion of the growth model in line with a roadmap with proper steps so as to form an in-depth model of growth by 2020, guarantee growth quality, and improve the economy’s efficiency and competitiveness.

26. Monetary and Fiscal Policy
Applying monetary policies and their tools in a careful, flexible; closely attaching these policies to fiscal ones in order to curb inflation and maintain macroeconomic stability and a proper growth rate;
Tightening fiscal policies for thrift practice; uniformly taking measures to increase transparency, publicity and accountability in State budget collection and spending.
Maintaining State budget balance, public debts and national foreign loans;

27. Trade Policy
Promoting export, tightly controlling import of unencouraged goods and products which can be made at home;
Boosting the development of supporting industries and production of domestic consumer goods;
Further mobilizing more resources for development investments;
Tightening price and market control.
Maintaining balance of trade, balance of payments.

28. Restructuring Investment
Mobilizing resources for development investment so that total social investment accounts for 30%-35% of GDP;
Maintaining an appropriate percentage of State investment, about 35%-40% of total social investment;
Increasing the annual savings from the State budget for investment; spending about 20%-25% of total budget spending on development investments;
Renewing the distribution and use of capital, minimizing scattered investments and prodigality while improving efficiency of State investments.

29. Restructuring Investment (cont.)
Maximizing the scope and opportunities for private investors, especially Vietnamese ones;
Encouraging and creating favorable conditions for private investments into infrastructure, potential sectors and products of advantages, and spearhead economic zones.

30. Applying New Technology
Restructuring industrial production in accordance with technical-economic industries, regions and new values so as to increase scientific-technological content and percentage of domestically-made component in each and every products.

31. Shifting from Assembling to Manufacturing
Shifting from assembling to producing in sectors and products of competitive advantages, such as food processing, aquaculture, beverage, garment, footwear and leather products, associating them to the global network of production and the chain of values; developing some prioritized sectors and supporting industries like petro-chemistry, electronics and information technology, metallurgy, manufacturing engineering, green industries and recycled energy, automobile spare parts, and agricultural machinery in order to improve and raise the development level of the economy.

32. Promoting Services
Diversifying services and raising the development level of service sectors: commercial services, construction services, hotels, restaurants, tourism, telecommunication, finance-banking, logistics, education and training, health care, and agricultural production services;
Forming some tourism service centers with high-quality products imbued with national cultural identities, which can compete in the region and the world;

33. Thank you!

34. Sources
Master plan on economic restructuring in association with conversion of the growth model towards improving quality, efficiency and competitiveness during the period, Vietnamese Government.
GSO.