Despite the existing worries about high inflation, trade gaps and macroeconomic uncertainties, the big economic achievements in 2010 allows Vietnam to confidently start 2011 and enter a new period of development after three years of facing difficulties caused by the crisis.
Economists, policy makers and government officials all have agreed that the national economy has fulfilled the 2010’s target and has even surpassed some norms. Of course, the high GDP growth rate has been cited first.
“With a high growth rate of 6.78 percent, Vietnam is considered one of the countries that has recovered from the financial crisis,” said Do Thuc, General Director of the General Statistics Office.
Meanwhile, when Minister of Planning and Investment Vo Hong Phuc spoke about the socio-economic achievements in 2010 at the government’s conference held in the last two days of the last year, he emphasized that the national economy has recovered strongly with the growth rate increasing steadily every quarter. The high growth rates can be seen in all sectors of the national economy, especially industrial production. The industrial production value in December returned to the level obtained in the pre-crisis period with the growth rate of 16 percent.
The figures clearly show the steady recovery of the national economy. In the first quarter of 2010, the GDP grew by 5.84 percent, while the figure rose to 6.44 percent in the second quarter, and then to 7.18 percent in the third quarter and 7.34 percent in the fourth quarter. The figures were just lower than the 7.43 percent growth rate obtained in the first quarter of 2008, the time when Vietnam’s economy had just begun facing difficulties after a strong growth rate in 2007. On the contrary these are higher than the quarterly growth rates in the last two years. With the general growth rate of 6.78 percent in 2010, Vietnam can say that it has escaped from the economic depression.
“Though the figure 6.78 percent is still lower than that obtained in the first years of the 2006-2010 five-year plan, but the figure has a big significance because it officially says that Vietnam has officially left the group of low-income countries, entering a new stage of development, becoming a medium-class economy,” Thuc said when declaring about the national economy’s scale. In accordance with the current prices, the scale of the national economy has exceeded $100 billion, while the average income per capital has reached $1168.
High export turnover has also been cited as an outstanding feature of the national economy in 2010. The export turnover reached $71.6 billion in 2010, while the export growth rate reached 25.5 percent, or four times higher than the targeted six percent growth rate. Of course, the high growth rate was obtained after Vietnam experience a negative growth rate, which Vietnam has had to face for the first time in the last 20 years of “doi moi” (Renovation). However, it is undeniable that Vietnam’s export has been resuming a high growth rate what was seen in the pre-crisis period.
Meanwhile, the high rate of foreign direct investment (FDI) disbursement of $11 billion, the ODA disbursement of $3.5 billion, the $8.4 billion worth of overseas remittance and $1 billion worth of portfolio investment have also been as the big achievements. The profuse capital inflow has helped settle problems in the general payment balance. Deputy Prime Minister Nguyen Sinh Hung has announced that the deficit in the payment balance in 2010 was $4 billion only, or just a half of that of $8.8 billion in 2009.
Experts have pointed out that despite the fact that there are macroeconomic uncertainties, in order to obtain high economic growth rate, Vietnam had to apply loosened fiscal and monetary policies. In particular, the state budget’s deficit has climbed to a high level, even though it was lower than the targeted level, at 5.8 percent. As a result, the inflation rate has been pushed up.
In previous years, Vietnam’s economy obtained a double achievement: it could both maintain reasonable economic growth rates and curb inflation rates at low levels. However, this did not occur in 2010. The inflation rate in the whole year 2010 was very high at 11.75 percent
“The high inflation rate has influenced people’s lives, especially regular employees. This will be the big problem that we need to settle in 2011,” Phuc said.