Friday, 15 Dec 2017

Improved global economic prospects: Challenges and opportunities for Vietnam

Updated at Wednesday, 04 Oct 2017, 20:08
The Hanoitimes - International organizations forecasted the positive global economic for period 2017 – 2018, with expected growth rate from 3.5-3.6%, thanks to strong recovery from major economies in the first 9 months of 2017.
United States, the largest economy in the world, reached the economic growth of 3% in the second Quarter of 2017, the highest number in two years, and is expected to reach the growth rate of 3.4% in next quarters.

In Japan, the growth rate of 0.6% in the second Quarter is thanks to increased export. This is the longest grow period for more than a decade in Japan. While in the European Union, the economy has recovered gradually, thanks to easing monetary policy and the effort to restructure and deal with public debt. Therefore, the growth rate in manufacturing has increased to 55.8 points, while the unemployment rate has reduced to the lowest percentage since 2009. On the other hand, China’s economy has achieved its target growth of 6.5% in 2017, due to the growth rate in the first six months of 6.9% with increased credit growth, investment and other new fields such as digital economy, services and technology. 

Other Asia’s economies also have achieved positive results, such as India (above 7%), Philippines (6.5%), Vietnam (6.41%), and Malaysia (5.8%). According to the United Nation, global trade has increased to the highest number in 6 years with the expected growth rate of 4% (the first half of 2017 with growth rate of 4.3%), thanks to stable goods price, growth recovery and positive sentiment among business communities in economies. 

Trade activities in emerging economies in Asia have recovered, which contributed to approx. 70% of the total trade activities in the world. Importing industrial materials for the US, EU and Japan has also increased. 

Foreign Direct Investment (FDI) in the world is expected to increase 5%, at 1,8 trillion USD in 2017, compared to the growth rate of 2% in 2016, in which the US, China and India are 3 countries attracting the most FDI. In particular, survey conducted by the United Nation Conference on Trade and Development (UNCTAD), foreign investors still maintain confidence in Asian’s emerging economies. 

With regard to Vietnam’s economy, the total Gross Domestic Product (GDP) has increased by Quarters. The number announced at a meeting on Quarter III, 2017 shows, GDP will increase 7.46% (1st Quarter is 5.15%, 2nd Quarter is 6.28%). GDP growth rate in the first 9 months is at 6.41%. Growth rate in Quarter III has significantly increased due to the strong growth in industrial sector (13.2% compared to the same period of last year), with significant contribution from processing and manufacturing industry (12.77%), and increase in export (19.5% compared to the same period of last year).

Improved global economic prospect and trade recovery have created opportunities for Vietnam to expand export. As such, export value of Vietnam has increased 21.4% in the first 9 months, at 289.14 billion USD. It is the result from the government’s effort to push forward with the economic plan and the reflection of the global economic recovery. 

​The foreign currency market is stable, with demands for foreign currency of citizens are timely dealt with. On the other hand, attracting FDI is in record high as of September 20, with 14.6 billion USD of newly registered capital. If this number includes projects with adjusted capital of 6.8 billion USD, the total registered capital will increase 21.7% compared with same period of last year. FDI fund disbursed in the first 9 months is 12.3 billion USD, up 15%.

However, in the context of fierce competition in the global market and the increasing trend of protectionism, Vietnamese goods are facing difficulties in accessing some markets, especially goods which are considered sensitive for protectionism. 
Ngoc Thuy
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