VIETNAM’S ECONOMY ON THE UP
Since the depths of the 2008 financial crisis the global economy has not fully rebounded, which can be seen in a slow recovery in several leading economies and some others are still stagnant. Vietnam had enjoyed an average growth rate of more than 8% before the advent of the then economic disaster. As the impacts of the financial crisis started to bite, Vietnam, among others, has experienced numerous challenges, which bogged down its economic performance to an average growth of around 5%.
To date, the world economy is still in sluggish recovery, but the Southeast Asian country is in a different story. The government has exerted all available spaces to manoeuver the economy out of these debilitating circumstances, with an expansion of 6.03% in the first quarter of 2015. Inflation has been kept in check with a slight increase of only 0.04% in the first four months this year.
Vienamese financial markets is in healthy condition, in which stable liquidity has been provided by commercial banks that have been restructured. Along with this, the country’s stock markets has been back on recovery track towards bullish ones, fortified by a relative low P/E ratio in the first quarter this year compared with regional markets. Property markets also bounced back from stagnation caused by the financial calamity, as the number of property transactions has soared by three times year on year in the first four months.
A new life has also been breathed into industrial production with a 9.4% rise of IIP (Index of Industrial Production) compared with the same period last year. A domestic of above 90 million citizens appeared to present a promising demand for goods, illuminated by an increase of 2.8 points in its PMI (Purchasing Managers’ Indices) which reached 53.5 points. This can potentially be a lucrative playfield for invesment amid a gloomy outlook for the regional and global economies.
All this economic performance could indispensably be traced to a sensible response by Hanoi’s administration through its management tools. Policymakers have been in complete control of any development in the economy, while the authorities have carried out appropriate countermeasures against adverse effects of a global slowdown. For instance, the government has effortlessly pressed ahead with a radical overhaul on state-owned enterprises through a deeply enhanced equitisation programme. Many state-run corporations with poor performance were dissolved, laying a level ground for fair competition. Public debt governance has been renovated to match international standard, providing a safe prospect for the economy.
The well-being of the Vietnamese economy has been highly spoken of by the international economic institution from World Bank, IMF to HSBC bank. A bright future for this market can be ensured by an optimistic forecast by these organisations, in which Vietnam can attain a growth rate of 6.0% in 2015 and even faster in coming years. That indicates that the Indochinese economy will still be a driving force for the region as well as be a potentially promising market for investment.
With a government open to reform, Vietnam will continue to integrate further into the regional and global economy in conformity with global norms and principles that can offer foreign investors more favourable conditions to launch their business ventures.