Scribd
Upload
35 views3 pages

2.1 Vietnam's Gross Domestic Product (GDP)

Vietnam has experienced rapid economic growth and development since launching economic and political reforms in 1986. It has transformed from one of the world's poorest nations to a lower middle-income country with GDP growth averaging 6.5% annually. Key drivers of its economy include robust domestic demand, export-oriented manufacturing, and growth in industries like electronics, food processing, and textiles. Vietnam also has significant potential in tourism, receiving over 10 million international visitors in 2016.

Uploaded by

Liew Chenxin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
35 views3 pages

2.1 Vietnam's Gross Domestic Product (GDP)

Vietnam has experienced rapid economic growth and development since launching economic and political reforms in 1986. It has transformed from one of the world's poorest nations to a lower middle-income country with GDP growth averaging 6.5% annually. Key drivers of its economy include robust domestic demand, export-oriented manufacturing, and growth in industries like electronics, food processing, and textiles. Vietnam also has significant potential in tourism, receiving over 10 million international visitors in 2016.

Uploaded by

Liew Chenxin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

2.

1 Vietnam’s Gross Domestic Product (GDP)

The Vietnam is the 45th-largest economy in the world measured by nominal


gross domestic product (GDP). The country is a member of Asia-Pacific
Economic Cooperation, Association of Southeast Asian Nations and the World
Trade Organization. Over the past 30 years, Vietnam has had a remarkable
development record. Economic and political reforms under ‘Đổi Mới’ (plan
renew), launched in 1986, have spurred rapid economic growth and
development and transformed Vietnam from one of the world’s poorest
nations to a lower middle-income country.

Vietnam’s economy continues to show fundamental strength, supported by


robust domestic demand and export-oriented manufacturing. The extreme
poverty rate is estimated to have declined to below 3 percent. Following 6.8
percent growth in 2017, preliminary data indicate that GDP growth
accelerated to 7.1 percent in 2018, underpinned by a broad-based pickup in
economic activity.

According to a forecast by PricewaterhouseCoopers in February 2017,


Vietnam may be the fastest-growing of the world's economies, with a
potential annual GDP growth rate of about 5.1%, which would make its
economy the 20th-largest in the world by 2050. Vietnam has also been named
among the Next Eleven and CIVETS countries. Vietnam’s medium-term
outlook is broadly favourable, and downside risks are tied to weak external
demand, shifting trade patterns, global financial volatility, and incomplete
banking and state-owned enterprise (SOE) reforms. On the upside, Vietnam is
strongly positioned to benefit from numerous free trade agreements that are
coming into force now and over the forecast period.
Vietnam’s growth is projected to moderate to 6.6 percent in 2019, driven by
credit tightening, slower private consumption and weaker external demand.
Inflationary pressures are projected to remain moderate, due to subdued
global demand conditions and moderate global energy and food prices. Over
the medium term, growth is projected to stay around 6.5 percent, as the
impact of current cyclical uptick dissipates. Poverty is expected to decline
further, as labour market conditions remain favourable.

GDP growth (annual %)

Vietnam's economic policy following the 1997 Asian Financial Crisis has been a
cautious one, emphasizing macroeconomic stability rather than growth. While
the country shifted toward a more market-oriented economy, the Vietnamese
government still continues to hold a tight reign over major state sectors, such
as the banking system, state-owned enterprises and foreign trade. GDP
growth fell to 6% in 1998 and 5% in 1999.

In 2001, the ruling Communist Party of Vietnam approved a 10-year economic


plan that enhanced the role of the private sector, while reaffirming the
primacy of the state. Growth then rose to 6% to 7% between 2000 and 2002
even in the midst of the global recession, making it the world's second fastest-
growing economy. At the same time, investment grew threefold and domestic
savings quintupled.
Vietnam had an average GDP growth of 7.1% a year from 2000 to 2004. The
GDP growth was 8.4% in 2005, the second-largest in Asia, trailing only China's.
The government estimated that GDP grew in 2006 by 8.17%. According to the
Minister of Planning and Investment, the government targeted a GDP growth
of around 8.5% in 2007. As March, 2018 Vietnam's economy continued to
grow, achieving the best annual growth rate in over a decade; which has led
media outlets to speculate if in the near future it could be one of the Asian
tigers.

Petroleum is the main source of energy, followed by coal, which contributes


about 25% of the country's energy (excluding biomass). Vietnam's oil reserves
are in the range of 270–500 million tons. Oil production rose rapidly to
403,300 barrels per day (64,120 m3/d) in 2004, but output is believed to have
peaked and is expected to decline gradually. In 2003, mining and quarrying
accounted for 9.4% of GDP, and the sector employed 0.7% of the workforce.
Petroleum and coal are the main mineral exports. Also mined are antimony,
bauxite, chromium, gold, iron, natural phosphates, tin, and zinc.

Although the industrial sector contributed 40.1% of GDP in 2004, it employed


only 12.9% of the workforce. In 2000, 22.4% of industrial production was
attributable to non-state activities. From 1994 to 2004, the industrial sector
grew at an average annual rate of 10.3%. Manufacturing contributed 20.3% of
GDP in 2004, while employing 10.2% of the workforce. From 1994 to 2004,
manufacturing GDP grew at an average annual rate of 11.2%. The top
manufacturing sectors — electronics, food processing, cigarettes and tobacco,
textiles, chemicals, and footwear goods — experienced rapid growth. Benefits
from its proximity to China with lower labour cost, Vietnam is becoming a new
manufacturing hub in Asia, especially for Korean and Japanese firms. For
instance, Samsung produces about 40% of its phones in Vietnam.

In 2004, services accounted for 38.2% of gross domestic product (GDP). From
1994 to 2004, GDP attributable to the service sector grew at an average
annual rate of 6.0%. In 2012, Vietnam welcomed 6.8 million international
visitors and the number is expected to reach over 7 million in 2013. Vietnam
keeps emerging as an attractive destination. In TripAdvisor’s list of top 25
destinations Asia 2013 by travellers' choice, there are four cities of Vietnam,
namely Hanoi, Ho Chi Minh City, Hoi An and Ha Long. 2016 was the first year
ever which Vietnam welcomed over 10 million international visitors.

You might also like