Economic Report Vietnam 2015 Presented by Vu Thi Diep and Marc van der Linden Netherlands Embassy Hanoi | 2 February 2016
Content Vietnam’s Economy • Bilateral Trade and Investment •
Vietnam’s Economy 3
GDP Growth 2015 GDP growth for 2015 was 6.6% with a Q4 growth of 7.01%. Highest growth sectors: industry and construction (+9.64%; 33.3% of GDP), services (+6.17%; 39.7% of GDP) and agro-fisheries (+2.41%; 17% of GDP) Yearly GDP Growth Quarterly GDP Growth 8% 9% 8,5% 2012 2013 8,4% Q4; 7,01% 9% 2014 2015 Q3; 6,81% 7% 6,96% 7,8% 8% 8,2% Q2; 6,47% 7,3% 7% 8% Q1; 6,12% 6,19% 6,04% 6,8% 7% 6,7% 6,7% 6% 7% 5,54% 5,44% 6,0% 6,2% 5,9% 6% 5,25% 6% 5,05% 5,4% 5,00% 6% 5% 4,96% 4,80% 5,0% 4,76% 5,3% 5% 4,75% 5% 5% 4% 4% Q1 Q2 Q3 Q4 4
Inflation 2015 Inflation increase for 2015 remained low at 2.05%. Continuing low oil prices have kept average inflation figures low through significantly lower transportation costs which has direct and indirect effects on inflation. Consumer Price Index per Quarter Consumer Price Index (CPI) per Year 18% 2012 25% 16% 15,95% 2013 22,90% 14% 2014 20% 12,20% 2015 18,60% 12% 9,96% 15% 10% 11,80% 8% 6,83% 6,73% 6,91% 10% 6,04% 9,21% 5,44% 8,90% 7,80% 8,30% 7,40% 6% 4,77% 6,90% 6,60% 4,83% 3,62% 4% 5% 2,56% 4,09% 3,00% 2% 3,20% 0.74% 0,86% 0,74% 2,05% 0,50% 0% 0% Quarter 1 Quarter 2 Quarter 3 Quarter 4 5
Foreign Direct Investment (FDI) 2015 has seen exceptional growth in FDI registrations, but not so much in value. More smaller projects. The value of disbursed FDI has shown an increase of near 18%, growing steadily since 2012. 2015 70 2500 64,01 2013 60 2000 Number of projects authorised 50 1588 1544 1500 1287 1275 40 USD billion 1171 +12.5% +17.9% +0% 1091 987 970 30 839 833 1000 811 In value 21,35 21,5 20 16,3 18,6 14,3 15,6 15,6 14,7 500 11,6 10 14,5 12 8 10 12,3 11 11 10,46 11,5 6,84 4,1 4,55 3,3 2,9 0 0 Newly Registered FDI New and Additionally Disbursed FDI, 2013 projects, Financed FDI, USD 14.5 bn USD 15.6 bn USD 22.7 bn Registered (USD bln.) Disbursed (USD bln.) Number of projects Source: FIA/MPI 6
Export and import (USD bn.) The biggest trade deficit comes from China (USD 32.3bn, increased 12.5%yoy), followed by Korea (USD 18.7bn) and ASEAN members (USD 5.5bn) 350 2015 328,0 298,0 300 263,5 229,0 250 165,6 -3.2bn 203,7 +12% + 8.1% 148 200 131,31 157,1 USD 114,35 143,4 150 127,0 106,75 111,3 84,84 84,7 80,71 100 69,2 69,95 58,5 62,76 132,2 150,0 162,4 44,89 114,6 36,76 50 96,9 31,97 72,2 62,7 57,1 48,6 39,8 Trade Deficit of which 26,5 32,4 Foreign USD17.1bn 0 Export USD 162.4 bn Import USD 165.6bn surplus and Domestic 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 USD20.3bn deficit (Gov.target <5% exports) Export (USD bn) Import (USD bn) Trade volume (USD bn) 7
Export and import Export 71% Foreign Top 5 export destinations Top 5 export items Domestic/Foreign Invested 1. USA: US$ 33.5bn. (+17%) 1. Telephones and accessories +23% Domestic sector: USD 47.3bn (-3.5%) 2. EU: US$ 30.9bn. (+10.7%) 2. Computers and components: 38% FDI sector: USD 115.1bn (+18.5%) 3. ASEAN: US$ 18.3bn. (-4.2%) 3. Footwear: +16.2% 4. China: US$ 17bn. (+14%) 4. Textiles and garments: 8.2% 5. Japan: US$ 14.1bn. (-4%) 5. Machinery and spare parts: 8% Import 59% Foreign Top 5 import destinations Top 5 import items Domestic/Foreign Invested 1. China: US$36.8bn. (+18.1%) 1. Machinery and spare parts: USD27.6bn. (+23.1%) Domestic sector: USD 67.6bn (+6.3%) (trade deficit $24.3 billion,) 2. Electronics, computers : USD23.3bn. (+24.2%) FDI sector: USD 98bn (+16.4%) 2. Korea: US$ 20.9bn. (+32.4%) 3. Telephones and spare parts: USD10.6bn. (+25.4%) 3. ASEAN: US$17.6bn. (+3.3%) 4. Automotive: USD6bn (+59%) 4. Japan: US$ 10.9bn. (+19%) 5. Fabrics and footwear materials: USD5bn. (+7.5%) 5. EU: US$ 8.1bn. (+23.3%) 8
Other Economic Issues In 2015 Vietnam has shown promise of robust growth and further intergration into the world economy, but underlying lack of reform and fiscal performance do require attention to realise this promise. Changes in the political leadership add uncertainty to the mix. Futher integration into the Limited progress improving Economic reform is still Uncertain political outlook for Vietnam’s fiscal health has a world economy through business climate and high on the agenda’s 2016 worrisome outlook trade agreements tackling corruption In the 12 th national congress of 2015 has been an important Economic reform has not seen The fiscal balance, on average, Vietnam has risen 3 places in World year in terms of reaching the much needed steps in the communist party a new for last 4 years is set at around Bank’s Doing Business 2016 report positive outcomes in trade 2015. various stakeholders like leadership has been chosen. -5,2%. While public debt has (90/189) on ‘ease of doing agreements (TPP and EVFTA) WB, IMF, international business Outgoing PM Dung has not been grown from 50,8% of GDP in business’, compared to 2015 and is and the start of the AEC. Full community and VCCI, have elected for a new top leadership 2012 to a forecasted 64,0% of ranked fifth in comparison with implementation of these stressed this at various for a position and the new leadership GDP in 2015. an average ASEAN peers. Singapore (1), agreements require (Vietnam Business Forum, has a profile of being more annual increase of 4,4%. Malaysia (18), Thailand (49) and significant reforms still and Vietnam Development Partners restrictive on economic integration Take in mind that the MoF Brunei (84) have a better score. for the AEC an important Forum) and in reports (WB into the world economy. Impact definition does not include the Vietnam’s score in Global Corruption challenge lies in Taking Stock). Consolidation of on Vietnams achievements in financial position of Vietnams Perception Index (31/100, ranking harmonisation of the different the achievements in the past is recent trade agreements and pace SOE sector. The actual public 112 globally) remains unchanged member economies. not enough. for required reforms therein debt is anticipated to be higher for four consecutive years (2012- remains unpredictable. than the official MoF figure 2015). 9
Bilateral Trade and Investment 10
Top 10 Investors in Vietnam 2015 Cumulative FDI as of 2015 Newly registered FDI (USD million) (USD billion) No Country No Country Registered FDI Projects Registered FDI Projects 1 Korea 2678.5 702 1 Korea 44.9 4944 2 Malaysia 2447.5 27 2 Japan 38.4 2883 3 Japan 1284.9 299 3 Singapore 34.7 1526 4 Taiwan 940.4 110 4 Taiwan 30.7 2475 British Virgin 5 Samoa 1314.1 24 5 19.2 620 Islands 6 UK 1265.7 30 6 Hongkong 15.7 972 7 Singapore 1035.0 130 7 Malaysia 13.4 523 8 BritishVirginIslands 697.8 52 8 USA 10.8 780 9 China 665.5 169 9 China 9.9 1284 10 Turkey 660.3 2 10 Netherlands 8.1 253 12 Netherlands 279.3 24 11
Top 10 EU Investors in Vietnam 2015 Newly registered FDI 2015 Cumulative FDI as of 2015 (USD million) (USD billion) Registered FDI No Country No Country Projects Registered FDI Projects (mn.) 1 UK 1265.7 30 1 Netherlands 8.1 253 2 Netherlands 279.3 24 2 UK 4.7 239 3 France 84.1 27 3 France 3.4 440 4 Switzerland 75.2 9 4 Switzerland 1.9 110 5 Germany 46.8 18 5 Luxembourg 1.9 39 6 Italia 11.5 7 6 Germany 1.5 260 7 Denmark 10.9 6 7 Cyprus 0.96 13 8 Luxembourg 7.2 6 8 Denmark 0.7 115 9 Ireland 4.8 5 9 Belgium 0.5 62 10 Spain 2.6 10 10 Italy 0.3 67 12
Trade | Main EU Trading Partners Germany 3213 5705 Netherlands 691 4762 UK 734 4649 Italia 1453 2851 France 1261 2953 Spain 13.2% 404 2302 Austria 412 2181 Market share Belgium 495 1180 Sweden 240 937 Poland 176 585 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 USD million Export to VN Import from VN Total trade 13
Trade | Bilateral Trade (USD million) 6000 2015 vs. 2014 5.453 5000 4.762 4000 3.852 3.615 +42% +37% 3000 Export NL to 3.348 Export VN to NL 3.180 Vietnam 2.027 2.937 2000 2.476 1.406 1.334 1.100 1.546 920 1000 720 976 1.017 517 550 700 600 USD 4,762M USD 691M 490 691 704 400 678 504 387 481 430 400 320 317 230 130150 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Export to Vietnam Export to the Netherlands Total trade 14
Trade | Bilateral Trade +41.5% Total Trade: USD 5,354M 205 Machinery tools and spare parts Computers and spare parts 1143 Automobile accessorises and spare parts 52 Telephones and spare parts 801 Chemical products 41 Footwear 534 Milk and dairy products 37 Textile 514 35 Steel products Cashew nuts 309 USD million USD million 15
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