According to the NFSC’s Deputy Chairman Ha Huy Tuan, the 6.5% expansion rate is satisfactory amid negative impacts from the global economy’s uncertainties. In addition, annual inflation is estimated at 1%, which is fairly low for the past ten years. Data in other areas also shows positive results such as stability in the gold and currency markets and strong export growth despite a sharp fall in oil prices.
He attributed these successes to the government’s resolve to implement economic development policies, the enactment of new business-friendly laws and the business community’s greater efforts.
However, Tuan acknowledged that there were still a number of issues to be dealt with such as a slowdown in services and agricultural growth, which indicates that efforts to change Vietnam’s economic structure have not delivered and the economy will continue to depend on the industrial sector.
In addition, Vietnam is facing growing public debt, budget deficit and ratio of debt obligation to GDP. Although the rate of public debt is still considered safe, it is fast approaching the dangerous threshold, according to calculations by international organisations. The goal of bringing the rate of non-performing loans to below 3% has been achieved but there is still much to do. Lastly, small and medium-sized enterprises are still struggling while the equitisation of State-owned enterprises is progressing quite slowly.
The NFSC’s deputy chairman said that in 2016 Vietnam would see deeper integration and thus feel greater impacts from the global economy. He advised that the government closely follow developments in the Chinese economy, especially its projected economic slowdown and policy changes, in addition to the US economic policy, especially its monetary policy.
Recently the addition of the Chinese yuan to the IMF’s basket of reserve currencies, China’s devaluation of its currency and the US Federal Reserve’s interest rate rise have affected the global economy and will definitely exert an impact on the Vietnamese economy.
Tuan added that oil prices should also be taken into consideration as they have hit a new low in recent days. The global supply is expected to continue rising following the US Congress decision to lift the oil export ban while the global economy’s total demand is forecast to rise at a modest rate. As such it is highly likely that oil prices will continue to go down in the future.
The NFSC official recommended that the government continue to give priority to maintaining macroeconomic stability as a foundation for further growth while accelerating economic restructuring, SOE equitisation and administrative reform, among others, in order to achieve better economic performance in 2016.
