Vietnam’s GDP Rises in 2013
HANOI – Vietnam’s gross domestic product (GDP) rose 6.04 percent in the fourth quarter of 2013, up from 5.42 percent in Q3. Vietnam’s strong Q4 growth figures bring the country’s total economic growth in 2013 to 5.42 percent – up from 5.25 percent growth in 2012.
According to the International Monetary Fund (IMF), Vietnam’s growing economy is being supported by both exports and increased foreign investment in the country.
IMF data indicates that the country’s exports-to-GDP ratio increased 75 percent since last year, and Vietnam received US$11.5 billion in disbursed foreign investment in 2013 – a 10 percent increase. A further US$21.6 billion in FDI was pledged by investors in 2013, a gain of 55 percent from a year earlier.
“This year’s growth is a sign of recovery for the economy, showing that the government’s efforts to tame inflation and regain macroeconomic stability are sound and timely,” the Vietnamese government said in a statement. Unlike many nations, Vietnam traditionally releases full-year data before the end of the year.
Several analysts attribute this year’s strong growth at least partially to governmental efforts to boost Vietnam’s economic efficiency and stability by soliciting increased foreign investment. Efforts to reduce corruption and combat inflation were also viewed by many as responsible for driving additional FDI into Vietnam’s economy and improving investor confidence.
“With what it has achieved this year, Vietnam has a better ground for more sustainable economic growth in the years ahead, although a high ratio of bad debt in the banking system will remain a headache for the government,” noted Tham Duong with the Banking University of Ho Chi Minh City.
Vietnam’s trade surplus is expected to reach US$863 million this year, up from a surplus of US$747 million in 2012. According to the Vietnamese government, the industrial production index will also rise 5.9 percent faster than last year’s expansion of 4.8 percent.
Vietnam’s service sector – which makes up 43 percent of the nation’s economy – led the country’s 2013 sectorial growth by expanding 6.56 percent. Close behind was Vietnam’s construction sector, which expanded by 5.43 percent, and the agriculture sector which grew by 2.67 percent.
As higher costs, policy ambiguity, and rising wages in China drive many companies to move their manufacturing to neighboring Asian economies, Vietnam’s young population and comparatively low wages make the country an increasingly attractive investment destination for foreign companies. With TPP ratification expected in early 2014, Vietnam will continue to woo foreign investors from the United States and other western nations for years to come.
Vietnam’s 2013 growth exceeded most analysts’ expectations, and 2014 may be set deliver similar surprises.
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