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The 7 most impactful economic events in 2010
In 2010, the ups and downs in the gold, foreign currency and real estate markets made a lot of people suffer. VnMedia reviews the most important economic events which may continue having impacts in the next year.
1. The interest rate race
The year 2010 witnesses an interest rate war triggered by commercial banks which negatively influenced the goods market.
Right at the beginning of 2010, the Government requested commercial banks to lower the interest rate to 12 percent per annum. However, banks still raised them in order to attract more capital. The deposit interest rate reached 18 percent at its peak.
The monetary market has only cooled down after the State Bank of Vietnam recently announced it will take drastic measures to curb the interest rate increases. As the result, banks have committed not to mobilize capital at the interest rate of higher than 14 percent per annum.
2. The gold and foreign currency market chaotic
The year 2010 witnessed the gold price reaching the record high.
On November 9, 2010, the market saw the gold price skyrocketing, and the record high of 38 million dong per tael was reached after the gold climbed to $1400 per ounce.
In order to cool down the market, the State Bank of Vietnam then allowed enterprises to import gold. The import tariff reduction from one percent to zero percent and the export tariff increase from 0.5 percent to one percent both helped bring the gold price to the its actual value.
Experts believe that the gold price was chaotic because of speculations. In 2010 alone, gold traders would earn the profit of 33 percent thanks to the gold price increases.
In 2020, the State Bank of Vietnam unexpectedly adjusted the exchange rate twice.
3. The inflation rate sky high at 11.75 percent
Despite the great efforts by the Government to curb the inflation and the pledge by Government’s agencies to restrain the inflation rate at one-digit level, the actual consumer price index still climbed to 11.75 percent.
The inflation rate has far exceeded the 8 percent level set by the National Assembly. The rate is also higher than that predicted by international institutions. The World Bank predicted the inflation rate of 10.5 percent for Vietnam, while ADB 10 percent.
4. The ups and downs on the stock market
Unlike gold investors, securities investors have incurred the loss of 18 percent this year. At the beginning of the year, analysts said that stock investments would bring the highest profit this year. However, the prediction has turned out incorrect.
5. Real estate prices followed gold prices and urban planning
Real estate prices increased sharply in 2010 by 30-100 percent. The sector in Hanoi has been considered as relatively attractive to investors.
A land price fever occurred in mid 2010, after it was said that Ba Vi area would become the new administration center of Hanoi. Hundreds of people rushed to hunt for the land plots in Ba Vi area, thus pushing the land price in the area increase by tens of percent.
6. 60 percent of FIEs report loss
By December 21, 2010, the total investment capital of foreign invested projects had reached $18.595 billion, a decrease of 17.8 percent, or $4 billion in comparison with 2009.
The noteworthy thing is that 60 percent of foreign invested enterprises (FIEs) have reported losses. This has raised doubts about the honesty of the enterprises because
They have still been expanding business and trying to purchase the stakes from Vietnamese partners
7. Vinashin on the verge of bankruptcy
In the last four years, since the day Vinashin began operating as an economic group, it had incurred the loss of 80 trillion dong, or $4.2 billion, or four percent of 2009’s GDP.
The Government is making efforts to rescue the group.
vietnamnet, VnMedia
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