Vietnam Gains 6.6 % GDP Growth in Six Months

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June 23 – Vietnam’s gross domestic product rate is estimated at 6.6 to 6.7 percent for the first six months of the year.

According to the Deputy Minister of Planning and Investment, Cao Viet Sinh, the rate helps ensure the government’s target annual growth rate of 7 percent.

Preliminary figures showed that Vietnam attracted US$31.6 billion worth of foreign investment during the period compared to last year’s US$21.3 billion.

Vietnam Mourns Death of Reformist Leader

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June 16- The country held a public funeral Sunday to mourn the death of former Prime Minister Vo Van Kiet. He was the prime minister from 1991 to 1997 who led the nation’s economic reforms and supported normalization of ties with the United States. He was 85.

Kiet died last Wednesday in a hospital in Singapore, where he was taken following a stroke.

The government announced two days of mourning to honor Kiet with flags flying at half-mast.

In Vietnam’s Las Vegas, Foreign Passports Required

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June 12 – Vietnam will soon have its very first casino at the Ho Tram Strip resort in southern Vietnam. To be constructed at a cost of US$4.2 billion, the casino which will only be accessible to foreigners, is one of the largest investments in Vietnam's tourism infrastructure. The builders, Canadian-based Asian Coast Development, say that the casino will be part of a resort which will have two five star hotels.

Vietnam has become the most popular destination for the hospitality industry in south east Asia, as it offers the same climate and low cost conditions as neighboring Thailand or Indonesia, but is not yet saturated. This has spurred an impressive volume of infrastructure development and construction activities to cater to the country's newfound source of income.

The Ups and Downs of Vietnam’s Economy

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June 11 – Things are changing so fast in Vietnam, it's hard to keep track. Last year with a GDP growth rate of 8.5 percent, the country was the place to be, money was pouring in, infrastructure was booming & the country was minting millionaires. Now however times seem to have changed drastically for Vietnam. The countrys' grappling with runaway inflation (25 percent), the highest interest rates in Asia (12 percent), a plunging currency (the dong fell 1.5 percent against the dollar in the last 6 months) and their stock markets nosedived 60 percent to become the worst performing in the world over the last month.

To make matters worse, Moody's, which grades creditworthiness, lowered Vietnam's ratings outlook last week to negative from positive. Poor ratings signal that banks may have trouble meeting their financial obligations, undermining investors' confidence in the country. In a nutshell, the economy overheated and the government was too slow to respond, says Jonathan Pincus, chief economist for the United Nations Development Program in Vietnam in a recent Time magazine article.

Vietnam Now Premier Emerging Market Destination

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June 4 – Vietnam emerged as the most attractive emerging market destination for retail investment in the seventh annual Global Retail Development Index (GRDI), a study of retail investment attractiveness among 30 emerging markets conducted by management consulting firm A.T. Kearney.

Vietnam's leap to first place in the 2008 GRDI from fourth place in 2007 was driven by strong GDP growth, changes to the country's regulatory structure favouring foreign investors and increasing consumer demand for modern retail concepts, the report said.

The report states that while Vietnam's US$20 billion retail market pales in comparison to India or China, the absence of competition and 8 percent GDP growth, make it an attractive expansion opportunity for global retailers.

Credit Rating Agency Lowers Vietnam Outlook

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June 2 – Last week, international credit ratings agency Fitch lowered its Vietnam rating from stable to negative.

Fitch Ratings, a global credit rating agency, gave Vietnam a BB-minus sovereign rating. The new rating is three levels below investment grade.

Investment grade refers to the quality of a company's credit. A rating below that increases the chances of a company not being able to repay debt.

Vietnam to Lift Rice Export Ban by July

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May 30 – Vietnam says that its ban on rice exports may be lifted in July adding that the coming crop harvests from the north will turn out better than expected.

The country’s winter-spring crop from its 32 northern provinces has progressed well and should yield the same amount as last year. Last year, the same provinces produced 6.15 million tons of rice.

Businesses will be allowed to sign new rice export contracts after June 30.
Vietnam is the world’s second-largest rice exporter. Last March, it introduced a three-month ban on rice exports to maintain local supplies.

Vietnam To Boost Exports to Africa, Middle East

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May 16 – Vietnam aims to boost exports to the Middle East and South Asia by US$2.3 billion, according to sources.

The figure is a 33 percent increase compared to last year.

For 2007, the country earned export revenues of US$230.5 million for the United Arab Emirates (UAE) and US$201.8 million for Turkey.

The country’s exports to these regions include: rice, coffee, textiles, garments, footwear, plastics, electronic appliances, seafood, tea, rubber, coal and timber.

The Ministry of Industry and Trade wants current export revenues to reach US$326 million for the UAE, US$141 million for Egypt, US$299.8 for Turkey, US$236 million for India and US$184.9 million for South Africa.

Vietnam is also thinking of importing competitive goods from these regions like petroleum and chemicals from Kuwait and Saudi Arabia, textiles and garments from India, plus cotton and timber from nations in Africa.

PetroVietnam to Control Rising Fuel Costs

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May 12 – State-owned, PetroVietnam announced efforts to control rising fuel and fertilizer costs by increasing domestic natural gas production and finding cheaper import alternatives.

In a press conference, the company vowed to cut waste and concentrate in its core business, saving an estimated VND550 billion (US$34.4 million).

"PetroVietnam will still inject capital into key projects for ports, warehouses and shipping fleets, but it will cease putting capital into real estate construction projects and other less-effective projects," management board member, Phan Thi Hoa, told VNS.

He said the company would review all projects and direct capital only to highly-prioritized projects.

Vietnam Car Sales Increase By 181 Percent

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May 12 – The Vietnamese Automobile Manufacturers’ Association (VAMA)
reports that car sales for the first four months of the year increased by 181 percent led by a rise in the commercial car segment. The 16-member VAMA announced combined sales of 47,366 units for the period.

Vinamotor sold the most number of units sold at 11,230, followed by Toyota with 7,896 and and Truong Hai with 7,492. Commercial car sales rose by 313 percent with 29,745 units sold, while passenger car sales went up 105 percent with 7,791 units. For April, automobile sales jumped to 13,271 units, an increase of 183 percent.

Car dealers attribute the increase in sales with consumers shifting from motorcycles to cars and government plans to hike special consumption tax to 50-70 percent by the year's end.

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