Vietnam's economic picture in 2017 through an international lens

Through an international lens, Vietnam's economic picture has many bright spots alongside the dark tones of hot growth and bad debt.

Vietnam's economic outlook in 2017, most experts, organizations and international media all agree that Vietnam is a bright spot in economic growth in Southeast Asia this year.

With bright prospects, Vietnam is one of the largest economies in Asia.

Breakthrough development

Deutsche Bank senior economist Juliana Lee is optimistic about the remarkable growth of Vietnam's economy, based on the business environment indicators in 2016 as well as the Government's commitment to further economic reforms in 2017.

According to Ms. Juliana Lee, reforming state-owned enterprises plays an important role in Vietnam's financial situation because it increases the efficiency of public spending and the proceeds from equitization of state-owned enterprises can be used to pay down public debt.

Ms. Juliana Lee said that with foreign capital, Vietnam can make great progress in restructuring banks and resolving bad debts. Previously, Vietnam issued specific guidelines on state ownership, suggesting a rapid reform of state-owned enterprises this year.

With reform plans to enhance long-term growth potential, combined with a sustainable recovery of agriculture and exports, Vietnam is expected to achieve GDP growth of 6.4% in 2017, higher than in 2016, Deutsche Bank experts assessed.

Meanwhile, the Asian Development Bank (ADB) believes that in 2017, Vietnam's economic growth rate will increase by 6.3%.

Sputniknews quoted a report from the Central Statistics Office, saying that in 2016, Vietnam's economic growth for the whole year reached 6.2%. The news agency also published the Asian Development Bank's forecast for Vietnam's economic growth rate in 2017 at 6.3%.

The newspaper quoted Frederic Neumann, co-head of the Asian Economic Research Center at HSBC Hong Kong, as saying: Strong growth will continue in the next few years. Vietnam will increase its export market share on a global scale. Foreign companies will continue to invest in Vietnam to take advantage of its low-cost and highly skilled labor force.

Attractive destination for investors

The Star Online said the volume of goods exported from Vietnam increased, amid the recession in global trade that has negatively affected Singapore and China. The establishment of giant enterprises such as Samsung Electronics Co in the country has turned Vietnam into an international center for electronics manufacturing.

Vietnam is an attractive destination for international investors (Illustration photo: KT)

In another article, Bloomberg wrote that investors are betting on Vietnam. For the first time in two years, Vietnamese companies’ shares are valued higher than those of their regional neighbors. This result is guaranteed by the Vietnamese economy’s good macroeconomic indicators and domestic political stability, while other countries in the region are facing political changes and economic crises.

According to Bloomberg, now is a favorable time for foreign corporations to increase investment in Vietnam because the government is accelerating the privatization process of state-owned enterprises.

However, besides positive forecasts, international press also warned about risks that could impact economic growth in Vietnam.

Business Insider said that despite impressive results, Vietnam faces many challenges related to its loose monetary policy. In 2016, Vietnam's credit growth "hotly" reached 20%, so the phenomenon of increasing bad debt is inevitable. In addition, Vietnam's banking system has not fully recovered from the 2011 crisis./.

According to VOV