Vietnam's Economic Performance - Round-up
GDP Growth:
GDP growth is estimated to reach 8.2 %, exceeding the initial target of 8 % and higher than the average growth rate of 7.5 – 8 % set for the 2006 - 2010 period. Economic structure saw an increase in the proportion of industry, construction and services, and a reduction in the proportion of agro-forestry and fisheries.
This development, led by strong-performing key economic zones in the Northern, Central and Southern regions has resulted in greater competitiveness in industries, services and tourism, and expanded export for the country. However, there remains concerns about the quality of the development. Though GDP growth has surpassed the Government’s target, it has not yet met its potential. The economy’s competitiveness remains poor and the structural adjustment to adapt to new trade relations is progressing at a slow pace. This situation is well recognized and efforts and actions are being planned for the immediate future.
FDI:
The FDI inflow to the country this year hit nearly US$10.2 billion, an increase of 47% compared with previous year, and the highest number since the Law on Foreign Investment was promulgated in 1987. It’s significant that this year, many transnational corporations and groups have invested in large scale projects which favorably enhance the transfer of high-technology. This shows increased confidence in the future of the Vietnam’s economy. As of year end 2006, FDI commitments totaled nearly US$63 billion, of which about 58% had been dispersed. About half of FDI has been directed at the two major cities (and environs) of Ho Chi Minh City and Hanoi. Sectors that attracted the most FDI are industry and construction.
Stock market:
The year 2006 witnessed the booming of Vietnam’s stock market. The market capitalization rate rose from 1% of GDP in 2001 to 17% of GDP this year and is on the rise (VN-Index has passed 900 in the second week of January 2007).
There is growing wave of companies and funds listed on the VN-Index. The number is 60 and 20 respectively as of 31/12/2006. At the end of 2006 there were 170 shares and funds certificates were issued.
These developments is attributed largely to an improved legal framework. Law on Securities was approved on August 23 and is expected to create favorable conditions for shares-trading, market-operation, protecting the investors’ legitimate rights and creating more transparency in the market.
