Top 10 economic events in 2016
The following are Vietnam’s top ten economic events in 2016.
The Resolution adopted at the 12th National Party Congress has defined tasks of stepping up renovation in a comprehensive and synchronous fashion; accelerating the economy fast and sustainably; and developing Vietnam into a modern, industrial country.
The five-year average economic growth is expected to reach 6.5%-7% per year. By 2020, an average gross domestic product (GDP) per capita will stand at about US$3,200-US$3,500, whilst the proportion of industry and services will make up some 85% of the GDP. Total average social investment in the next five years will account for 32%-34% of the GDP, and State budget overspending will comprise of only 4% of the GDP.
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The second session of the 14th National Assembly has approved a national financial blueprint in the 2016-2020 period, along with a middle-term public investment plan. Accordingly, the proportion of State budget overspending between 2016 and 2020 will not exceed 3.9% of the GDP. The annual public debt index, the Government debt, and the foreign debt are set within the limit of no more than 65%, 54%, and 50%, respectively, of the GDP.
3. Economy grows despite difficulties
The drastic direction and administration of the Government, the high determination of the whole political system, and the active involvement of the business community, have backed the national economy to continue recording a positive growth in 2016. The gross domestic product (GDP) was estimated to expand by 6.21% compared to the previous year in spite of difficulties posed by natural disasters and the marine environmental incident in the four central provinces and the global economic headwinds. The macro economy remained stable while inflation was put under control.
4. Construction of nuclear power plant in Ninh Thuan halted
Deputies agreed to stop the implementation of the nuclear power project in the south central coastal province of Ninh Thuan at the second sitting of the 14th National Assembly. This was because since 2009 – the moment when the legislature approved a policy of investing in the project - the domestic and international situation has witnessed a lot of socio-economic changes. On the one hand, Vietnam’s scientific and technological capability at present has been limited to develop nuclear power. On the other hand, the project’s economic efficiency has yet been ensured while the production cost of nuclear power is higher than that of other energy resources.
5. Government issues Resolution 35/NQ-CP on supporting and developing businesses
Regarding businesses, especially private ones, as a driving force to increase competitiveness and economic autonomy, the Government on May 16, 2016 promulgated Resolution 35/NQ-CP on supporting and developing enterprises through 2020. The document sets the goal of having at least one million active businesses by 2020, including large-scale and financially strong ones. The State is committed to ensuring equal rights for all companies without discrimination of business forms and economics sectors in accessing financial resources.
6. Number of newly-established firms hit record
The number of newly-established businesses set a record high since 2013. More than 100,000 companies have registered to set up with a total investment of over VND800 trillion (US$35.3 billion), up over 17% in number and 48% in registered capital against 2015. The figures show that the new legal framework, solutions, and the action role of the Government in supporting and encouraging businesses to develop have continuously proved effective.
7. Maritime environmental pollution incident in central region
The waste discharge of the Taiwanese-invested Hung Nghiep Formosa Ha Tinh Steel Co. Ltd caused serious impacts on the marine environment from the central coastal province of Ha Tinh to Thua Thien-Hue, heavily impacting local production and lives. With the policy of not exchanging the environment with investment projects, the Government, ministries, sectors and localities took drastic measures to strictly deal with the wrongdoings, address consequences, support fishermen and force Formosa to make compensations.
8. The State Bank of Vietnam applies new exchange rate management mechanism
In 2016, the State Bank of Vietnam (SBV) has applied new mechanism of exchange rate management. The SBV announced a reference exchange rate between VND and USD on a daily basis. The new mechanism allows flexible fluctuations of daily exchange rates according to domestic supply and demand of foreign currency and global market developments, but still ensures the regulatory role of the SBV in monetary policy management.
9. Vietnam promotes international economic integration
The trade and economic ministers of 12 countries joining the Trans-Pacific Partnership (TPP) agreement signed this global trade deal on February 4, 2016, in Auckland, New Zealand, marking the official completion of negotiations and the start of ratification procedures in each country. After that, the free trade agreement (FTA) between Vietnam and the Eurasian Economic Union (EAEU) came into effect on October 5, 2016. The conclusion of the TPP and FTA has reaffirmed Vietnam’s efforts to promote international economic integration.
10. Vietnam sets record to welcome 10 million foreign tourists
Vietnam welcomed 10 million international visitors for the first time in 2016, a year-on-year rise of 25%. The country also served 62 million domestic vacationers. The tourism sector raked in VND400 trillion (US$17.65 billion) in revenues. This is an important milestone in the tourism sector’s path to become a national spearhead economic sector and make Vietnam a primary destination in the region.
