Despite of the global economic recession, the decrease in import-export volume and remittances, thanks to economic stimulus policies by our government, the GDP of 2009 has achieved great progress.
Now, with the help of DTiNews, we will take an overall look at nine economic footprints of the year to gain insights on the efforts of government, enterprises and individuals.
1 – Effective economic stimulus package
Economic stimulus package provides many privileges and helps enterprises to overcome difficulties.
Due to the global financial crisis, Vietnamese economic growth has been impacted negatively especially during the first quarter of 2009.
However, thanks to an effective economic stimulus package including a series of supporting methods such as loan interest decrease, tax exemption and additional capital investment, Vietnam was able to counter some of the impact of the recession.
According to World Bank, Vietnam has overcome the crisis better than other countries in the region.
2 – Prospective GDP and one digit inflation rate
One digit inflation achievement thanks to efforts by government.
The Vietnamese GDP growth rate was on the gradual rise from 3.1 per cent to 6.8 per cent during four quarters and the total rate for the year is 5.2 per cent, thus surpassing the goal of 5 per cent.
In particular, the government was able to maintain the average inflation rate for the year at 7 per cent.
However 2009 trade deficit is about $11 billion which is $6 billion lower than 2008. It is probably a positive signal to trade balance.
3 – Japan resumes ODA (Official Development Assistance) to Vietnam and the country gains access to huge ODA loans
Hai Van tunnel – an ODA funded project by Japan.
Japan has resumed providing ODA loans to Vietnam since February 2009. The decision is very significant in the relationship of two countries that look forward to a long term strategic partnership.
The total value of 2009's ODA was about $5.8 billion and disbursed $3 billion.
At the Consultation Group 2009, Prime Minister Nguyen Tan Dung stated, “Vietnam always evaluates each penny of ODA loans and ensures our commitments with the highest responsibilities.”
4 – Politburo calls for “Vietnamese to use local products”
"Vietnamese should use local products” campaign in Da Nang.
In addition to investment and consumer stimulus in the local market, the government also spent VND51 billion ($2.7 million) on trading promotion's in order to build and complete development impulse policies in the local market.
It is time for local manufacturers to review and make fundamental changes to improve quality, models, and prices of their products to compete against imported goods.
Hopefully in the future Vietnamese will love “made in Vietnam” products.
5 – Fluctuating gold prices
A year of gold price fluctuation.
2009 was an unsteady year for the gold market. Earlier this year, the price was VND1.8 million ($96) per tael. By November the price skyrocketed to VND2.93 million ($157) per tael. The state bank immediately took action by allowing gold re-import.
At the end of the year, the gold price sits at around VND2.7 million ($144) per tael.
6 – Interests and currency exchange rates unexpectedly change
Enterprises faced with hurdles to access foreign funds.
The Governor of the state bank unexpectedly raised interest rates to 8 per cent per year after maintaining 7 per cent for 10 months. Meanwhile, refinancing interest went up 7-8 per cent and reduction interest increased 5-6 per cent per year.
In addition, the governor adjusted the inter-bank average exchange into 17,961 VND against USD. Accordingly, the floor transaction price was 17,422 VND against USD and the ceiling one was 18,500 VND against USD.
Prior to the unexpected decision, the Governor implied he would not to devaluate Vietnam Dong, increase interests till the end of 2009.
7 – Remittance declination and a worry about payment balances
Vietnam is currently 10th on World Bank's list of countries receiving remittances worldwide
By the end of October 2009, remittances continued declining compared with the same period of the last year. The remittances for this year are estimated to be $6.8 billion which is 15-20 per cent lower than last year.
Decreases in remittance, export volume, FDI and the tourism industry has negatively impacted foreign currency balance.
8 – Stock market unstable
Investors expect a better year in 2010.
Vn-Index slashed 5.69 points to 297.52 points and hit 235 points at the bottom level in February but rose strongly to 600 points in October.
If an investor invests shares of safe categories for 3-6 months, the least profit is about 50 per cent of the initial investment.
Vn-Index strongly slashed points in the late 2 months of the year because of credit tightening and debt reduction by banks. At present, investors expect market recovery by early 2010 when banks and financial institutions announce their disbursement plan for the new year.
9 – Record rice export
Surplus of rice but worries remained about low prices
Vietnam is estimated to export 6 million tones of rice in 2009 worth $2.8 billion which is the record amount till date.
According to experts, despite natural disasters, affecting numerous granaries across the country, Vietnam has enough rice to feed nearly 89 million people and has about 5 million tones of redundant rice to export.
