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flag Vietnam Vietnam: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

After adopting a major reform plan (Doi Moi) in 1986, Vietnam experienced a period of strong growth. For several years, the Vietnamese economy was truly booming. The per capita GDP, which was only $220 in 1994, tripled between the years 2002 and 2010, to reach USD 1 755 per capita in 2013.

Vietnamese growth is sustained by international trade and foreign investments, with exports ensuring more than two-thirds of the GDP in 2013. The impact of the financial crisis on Vietnam was limited with a GDP growth of 6.2% in 2011, 5.2% in 2012 and 5% in 2013. Certain sectors, e.g. industrial production, textile, shoe, electronics and seafood production have been growing rapidly. The 2014 growth outlook remains one of the best in Asia (5.5%).

The government launched reforms for all the key sectors of the economy and anticipates partial privatization of public companies; however, their implementation remains gradual. A tax reform has also been undertaken in order to compensate for the fall in customs revenues, as a consequence of its entry into the WTO and to make the country more attractive to investors.  In order to deal with the global financial crisis, the government has established several recovery plans aimed at improving the business climate and therefore promoting production and exports, stimulating consumption and investments, increasing social security and reducing poverty, introducing monetary policies and effective taxation. 2013 has been another year of good economic results, even if the economy is relatively slowing down.

Domestic consumption remained very strong in 2013. Inflation remains high but on the decrease (18.7% in 2011, 12.6% in 2012 and 8.8% in 2013) and recent reforms have allowed to improve the standard of living of the inhabitants. The percentage of the population living on less than a dollar per day has declined in a significant way and it is now lower than China, India or the Philippines: the poverty rate went from 58% to 14% in the past 15 years. However, the urban unemployment rate has risen in recent years. The national unemployment rate was 2.1% in 2013 (after 4.5% in 2012), but under-employment, estimated at 30%, remains constant.

To ensure sustained growth in a period of high international uncertainty, at the end of 2011 the government launched what it calls "the three structural mid-term and long-term projects": developing infrastructure, training the young and modernizing the institutions. To reach these objectives, still in the agenda in 2014, the country will have to reform public companies, develop the private sector and modernize the banking system.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 134.60155.57170.57187.85e204.54
GDP (Constant Prices, Annual % Change) 6.25.25.4e5.5e5.6
GDP per Capita (USD) 1,5321,7531e2,0732,233
General Government Gross Debt (in % of GDP) 46.748.551.6e54.857.1
Inflation Rate (%) 18.79.16.65.2e5.2
Unemployment Rate (% of the Labor Force) 4.54.54.44.44.4
Current Account (billions USD) 0.239.279.47e7.79e7.00
Current Account (in % of GDP) 0.26.05.6e4.13.4

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

The declining agricultural sector is dominated by cultivation and plantations (rice, coffee, cashew nuts, corn, pepper, sweet potatoes, peanuts, cotton, rubber and tea), and aquaculture. However, it is the sector that employs the biggest part of the population. It represents nearly 20% of the GDP in 2013 (19.3%).

Industry, which represents over 38.5% of the GDP, is the main driver of growth in the Vietnamese economy. The sector is still dominated by large public groups. The country's main industries are textile, food industry, furniture industry, plastics and paper industries. The energy sector is in full-growth since several years ago (coal, hydrocarbons, electricity, cement, steel and naval industry). Even though it is the "new comer" in the oil industry, today Vietnam is the third biggest Southeast Asian producer. The country has also invested into high value-added industries such as cars, electronic and computer technologies (software).

The services sector is sustained by tourism and telecommunications.  These profitable sectors should strongly contribute to the economic health of the country in the next following years. In 2013, the tertiary sector represented over 42,2% of the GDP.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 47.4 21.1 31.5
Value Added (in % of GDP) 18.4 38.3 43.3
Value Added (Annual % Change) 2.7 5.4 7.6

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Vietnamese Dong (VND) - Average Annual Exchange Rate For 1 USD 17,065.0818,612.9220,509.7520,828.0020,933.42

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Vietnam on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
50.8/100
Position:
Mostly Unfree
World Rank:
147/178
Regional Rank:
16/25

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
5.87
World Rank:
59/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Vietnam is one of the Asian economies most open to international trade, which represents more than 100% of the GDP, more than twice the Chinese rate and more than 4 times the Indian rate. Vietnam has demonstrated its strong commitment to trade liberalization in these recent years. It has joined the WTO in 2007 and signed Free Trade Agreements (FTAs) with ASEAN countries and the USA. Vietnam also has a cooperation agreement with the EU.

Vietnamese trade is characterized by a strong geographic inequality, the country shows a trade surplus with western countries and a growing deficit with its Asian neighbors. This trend was again verified in 2013. Vietnam is currently classified as the second largest rice exporter in the world, behind India but, since 2012, ahead of Thailand. The other exports mainly constitute textiles, clothing and footwear products and crude oil, whereas imports are mainly made up of tool machinery, refined oil and steel. Since 2011, the government is implementing measures to reduce the trade deficit which is responsible for the deficit of the balance of payment.

The main export customers of Vietnam are the USA (18% of exports in 2013), Japan, China and South Korea. For imports, the country's main partners remained, in 2013, China (27% of all imports), South Korea, Japan and Taiwan.

The Vietnamese economic model remains heavily dependent on foreign investment and exports, namely to the United States and Europe. Since 2003, these have been growing on average by 25% annually.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 69,94984,839106,750113,780132,125
Exports of Goods (million USD) 57,09672,23796,906114,529132,135
Imports of Services (million USD) 6,7599,77111,70712,35313,015
Exports of Services (million USD) 5,6667,3558,5819,51010,380
Imports of Goods and Services (Annual % Change) -6.88.24.19.117.3
Exports of Goods and Services (Annual % Change) -5.18.410.815.717.2
Imports of Goods and Services (in % of GDP) 73.380.283.576.579.8
Exports of Goods and Services (in % of GDP) 63.072.079.480.083.9
Trade Balance (million USD) -7,607-5,136-4509,8858,730
Trade Balance (Including Service) (million USD) -10,028-7,597-3,4306,9657,330
Foreign Trade (in % of GDP) 136.3152.2162.9156.6163.7

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
United States 18.1%
Japan 10.3%
China 10.0%
South Korea 5.1%
Malaysia 3.8%
See More Countries 52.8%
Main Suppliers
(% of Imports)
2013
China 27.9%
South Korea 15.7%
Japan 8.8%
Thailand 4.8%
Singapore 4.3%
See More Countries 38.6%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras 14.8%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 5.6%
Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 4.4%
Footwear with outer soles of rubber, plastics,...Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather (excl. orthopaedic footwear, skating boots with ice or roller skates attached, and toy footwear) 2.8%
Furniture and parts thereof, n.e.s. (excl. seats...Furniture and parts thereof, n.e.s. (excl. seats and medical, surgical, dental or veterinary furniture) 2.2%
See More Products 70.3%
- bn USD of products imported in 2013
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 7.7%
Electrical apparatus for line telephony or line...Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof 5.7%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 5.6%
Flat-rolled products of iron or non-alloy steel,...Flat-rolled products of iron or non-alloy steel, of a width >= 600 mm, hot-rolled, not clad, plated or coated 2.0%
Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras 1.4%
See More Products 77.5%

Source: Comtrade, Last Available Data

 
See More Products
Main imports (Intracen)
Main exports (Intracen)
 
 
 

Main Services

- bn USD of services exported in 2012
71.15%
21.56%
1.56%
1.44%
1.15%
1.01%
0.96%
0.67%
0.29%
0.21%
0.01%
- bn USD of services imported in 2012
69.61%
14.82%
4.66%
3.29%
3.04%
1.40%
1.33%
0.81%
0.46%
0.38%
0.20%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Vietnam Ministry of Trade
Vietnam Ministry of Planning and Investment
Statistical Office
General Statistics Office of Vietnam
Central Bank
The State Bank of Vietnam
Stock Exchange
Hochiminh Stock Exchange
Hanoi Securities Trading Center
Search Engines
Monava
Google Vietnam
Yahoo! Vietnam
Search.com.vn
Socbay.com
Economic Portals
Vietnam Economic Portal

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Political Outline

Executive Power
The President of Vietnam is the incumbent head of state and the nominal commander in chief of the military of Vietnam, chairing the Council on National Defense and Security. The Prime Minister of Vietnam Nguyen Tan Dung is the head of government, presiding over a council of ministers composed of 3 deputy prime ministers and the heads of 26 ministries and commissions. The President is elected by the parliament from among its members for a five-year term. The Prime Minister is appointed by the President from among the members of the parliament as head of the government. The Cabinet is appointed by the President on the recommendation of the Prime Minister and ratification of the parliament. The real power centre is the Communist Party of Vietnam (CPV).
Legislative Power
The National Assembly of Vietnam is the unicameral legislature of the government, composed of 498 members. It is superior to both the executive and judicial branches. All members of the council of ministers are derived from the National Assembly. Its members are elected by popular vote to serve five-year terms. According to the country's Constitution, National Assembly is the highest representative body of the people and the only organization with legislative powers. It has a broad mandate to oversee all government functions.
Main Political Parties
The Communist Party of Vietnam (CPV).
Current Political Leaders
President: Truong Tan SANG (since 25 July 2011) – CPV
Prime Minister: Prime Minister Nguyen Tan DUNG (since 27 June 2006) – CPV
Next Election Dates
Presidential: July 2016
National Assembly: May 2016
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
174/180
Evolution:
2 places down compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
7/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: October 2014