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Vietnam’s export growth expected to slow down
Vietnam’s prospect of export growth in the years to come looks gloomier than other neighboring economies, said a UNESCAP trade report.
The Asia-Pacific Trade and Investment Report 2011: Post-crisis Trade and Investment launched on Thursday in Hanoi said that while the region as a whole is expected to return to a historical trade growth rate of about 10 percent in 2011 and 2012, Vietnam’s trade growth is expected to be slower.
Export growth may slow down to 1.4 percent in 2011, and rise back to 8.9 percent in 2012, while imports are projected to increase by 4.9 percent in 2011 and 7.4 percent in 2012.
The report also pointed out that although Vietnam’s trade picked up last year, with an estimated growth of 5.2 percent in export volume and a rise of 2.5 percent in import volume, these figures were lower than the average rates achieved by Asian developing countries of 17.3 percent and 15.8 percent, respectively.
Witada Anukoonwattaka from the Trade and Investment Division, UNESCAP said at the launching ceremony that the macroeconomic instability is a near-term risk that may curtail economic growth and adversely affect the confidence of foreign investors.
She added that rising oil and food prices as well as the pressure of accelerating demand will continue to drive inflation, which had already risen above 20 percent in June 2011, compared with the same month in 2010. “The high rate of inflation may deter private consumption, increase production costs and hurt the export competitiveness of Vietnam,” she warned.
However, Nguyen Anh Tuan, Head of Division, Asia-Pacific Market Department of the Ministry of Industry and Trade, who was invited to the launching ceremony to comment on the report, said he was not concerned about the figures. “Personally, I think the way the report authors look at Vietnam is not new compared to those from other international entities like ADB and WB,” Tuan told the Saigon Times Daily.
Tuan said he wasn’t worried about these figures which were based on a different calculation. Moreover, these figures could have no influence on potential foreign investors who want to do business here. They make their decisions based on reality rather than figures, he said.
According to the report, Vietnam’s economy is currently ranked 53rd in the world, based on the value of the World Bank’s Logistics Performance Index, with a score of 2.96.
During the past five years, Vietnam has attracted a significant inflow of foreign direct investment (FDI) which has been growing at an average of 22 percent per year while the country’s FDI inward stock has been rising by 14 percent every year.
The country is ranked 4th in Southeast Asia in terms of FDI inflows.
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