The General Statistics Office (GSO) reports Vietnam’s GDP grew by 5.98% for calendar year 2014 – the highest growth rate since 2011. The consumer price index (CPI) declined sharply for the year while the nation’s export turnover has continued its upward trek.
Nguyen Bich Lam, GSO General Director granted an exclusive interview with the Voice of Vietnam radio to discuss the economic results for 2014 along with upcoming challenges for 2015.
Nguyen said the Vietnamese economy has shown positive signs with GDP surpassing the 5.8% benchmark for the year. There has been general optimism among leading economists for the economy as a whole and the agricultural sector in particular.
The year 2014 was a bumper year with the rice output having increased to a record 955,000 tons. Meanwhile, the seafood, construction and industrial sectors experienced strong growth as well. Most notably, the manufacturing sector experienced substantial growth of 98%.
The CPI in December grew by 1.84% from a year earlier. The unemployment rate has remained low with the economy humming right along generating in excess of one million jobs this year.
Open Economy
Although inflation has been curbed, it continues to be affected by other factors such as prices of materials, which are beyond the control of the government. Vietnam is an open economy, which means that world trade heavily influences the inflation rate.
Currently, Vietnam imports up to 91.2% of production materials from other nations. Therefore, the fluctuations in world prices directly impact prices in the nation’s economy.
In addition, despite the fact that businesses’ production activities show signs of recovery, there remain challenges. Notably, when the ASEAN Economic Community (AEC) comes into effect in 2015, there will be tougher competition with enterprises within the ASEAN bloc.
Moreover, the country has recently signed a number of free trade agreements and has to implement commitments within these FTAs. There is widespread confidence with the economic restructuring process, however it has been implemented much too slowly and we need to pick up the pace, Nguyen said.
