Sustaining Macro-economic Stability

The latest data released by the General Statistics Office (GSO) showed that Vietnam’s import and export turnover reached US$147 billion in the first nine months of 2011, a big rise from the same period of 2010. Particularly, exports valued US$70 billion, up 35.4 percent year on year, and imports were worth of US$76.9 billion, up 26.9 percent. The domestic economic sector earned US$32 billion from exports, up 33.1 percent, and the foreign-run economic sector raked in US$38 billion (excluding crude oil), up 37.5 percent. The domestic economic sector spent US$42.6 billion on imports, up 24.4 percent year on year, and the foreign economic sector expended US$34.2 billion, up 30.2 percent. According to GSO, the rise in export in the January - September period is resulted from higher prices of Vietnam’s key traditional exports like crude oil, coffee, rubber and pepper. Notably, major exports had hefty export turnover increases, specially apparels and seafood. Garment and textile export rose 31.1 percent; crude oil value climbed 52 percent; footwear turnover jumped 30.8 percent; and seafood takings surged 26.4 percent. According to GSO, the United States remained the largest export market of Vietnam with a total value of nearly US$11 billion, accounting for 17.8 percent of total exports, followed by the EU with US$10.2 billion (16.6 percent), ASEAN with US$8.6 billion (14 percent), China with US$6.6 billion (10.6 percent), etc.

 

Growth in some economic sectors remained stable although their rates were not as high as previous years. In particular, the industrial production expanded 7.8 percent in the first nine months; mining enlarged 0.8 percent; processing industry rose 10.7 percent; and electricity, gas and water production and distribution expanded 9.6 percent. Nonetheless, as of September 1, 2011, the inventory index of processed and manufactured industrial goods slid 5.5 percent year on year. Sharp drops in inventories were seen in tobacco (17 percent), dairy (18.2 percent), pulp (22 percent), and motor vehicles (27.7 percent). According to economists, the Vietnamese economy kept moving forwards in the first nine months of 2011 but the growth in some sectors was not very high. However, given global economic downturn in combination with tightened monetary policies to curb inflation in the spirit of the Government’s Resolution 11/NQ-CP, the growth was still a success of Vietnamese economy. In addition, according to the Government, inflation tends to slow down in recent months. The consumer price index (CPI) in September climbed 0.82 percent and GDP growth was 5.6 percent in the first nine months. These are good driving forces for the remaining months of the year.

 

The Government gave clear explanations to much-concerned government debt. According to the Government, up to 93 percent of government debt was ODA loans and concessional loans (ODA loans accounted for 74 percent; concessional loans made up for 19 percent).

 

According to economists, Vietnam's public debt is not a very serious problem because it is mainly ODA loans and concessional loans which have usually very low interest rates and very long maturity. In the future, if the current growth is maintained, the Government can absolutely balance and eliminate concerns about repayments to these debts. Besides, if Vietnam’s credit ratings stayed at BB as rated Standard & Poor’s, Vietnam’s government debt rate was at an average level in comparison to countries with the same ratings.