Vietnam’s GDP Growth Slowest in Decade
Mar. 29 – Vietnam’s government has estimated that its gross domestic product (GDP) has grown by 4.89 percent year on year during the first quarter of 2013. For comparison, Vietnam’s GDP grew by 5.44 percent during the fourth quarter of 2012.
2012 marked the slowest annual growth period in Vietnamese history since 1999 as its GDP only grew by 5.03 percent. Vietnam’s economy has slowed down after averaging 7 percent growth from 2000-2010. Excessive credit expansion and inefficient state-owned entities (SOEs) have been blamed for the economic slowdown.
The government has since pledged to boost growth and also contain inflation (which has been an issue of late as well), and the central bank has trimmed key policy rates seven times over the past year. The central bank is expected to open up an asset management firm to buy bad debts from banks in return for bonds that would allow them to lend more money to support the overall recovery.
Central bank official Pham Xuan Hoe has stated: “Bad debts of enterprises and high inventories are hampering national economic recovery efforts, [and] this matter cannot be solved overnight.”
The Vietnamese government aims to achieve 5.5 percent growth for 2013.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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