According to state agencies and experts, Vietnam’s economy in the eight months in comparison with the same period of 2006 is as follows:

Firstly, the economic growth rate continued to be high. Industrial production value in August rose by 18.7% compared to the same period of 2006, bringing the growth for the whole eight months to 17.1%.

Secondly, foreign investment capital continued to increase, with 97 new projects licenced in August, totaling US$733 million of registered capital, and 51 projects permitted to increase investment worth $118 million.

In the eight months there were a total of 814 new projects with the total registered capital of $7.1 billion, up by 64.6% year on year, a record high level since 1988. With 247 old projects allowed to increase investment capital worth more than $1.2 billion, the total foreign investment capital registered in the period was more than $8.3 billion, up by 39.8% compared to the same period of last year.

Foreign investment in the industry-construction sector was still at a high level but decreased while foreign investment in the service sector increased. The average capital amount invested in a project was over $8.7 million compared to 6.1% of the corresponding period of 2006.

Investment flow into key regions was still high. Notably, investment went to provinces that were not attractive in the past, for example Thua Thien-Hue, Hau Giang, Tay Ninh, Thai Binh and Ha Nam.

The volume of disbursed foreign capital by the end of August was more than $3 billion, up more than 20% year on year. It is expected that the figure for the whole year will exceed last year’s record ($10.2 billion in registered capital and $4.1 billion of disbursed capital).

Thirdly, exports continued to grow and Vietnam can fulfill its yearly target for exports.

Fourthly, the consumer price index (CPI) in August increased at a lower level than previous months after the State Bank of Vietnam took some measures to control inflation.

Fifthly, the volume of international visitors coming to Vietnam rose again and the country is forecast to welcome over 4.2 million visitors for the whole of 2007. The numbers of tourists coming from neighbouring countries increased at lower levels than previous months or decreased. However, the number of visitors from developed countries who spent liberally and stayed longer in Vietnam increased so tourism turnover of Vietnam this year is expected to exceed the $3 billion level of last year.

Besides positive aspects, the economic panorama in the first eight months of the year had some dark corners.

The growth rate of agriculture, forestry and fisheries increased at a lower level than the same period of 2006 and lower than the set target for 2007. Natural disasters and epidemics adversely affected cultivation and animal husbandry and the situation is forecast to develop unpredictably.

CPI increased at a lower level but the increase of CPI in August and the whole eight months was higher than that of August and the January-August period of 2006 (CPI of August 2007 rose by 0.55% compared to 0.4% of August 2006, CPI of eight months was 6.77% compared to 4.8% of the January-August period of 2006). If the CPI in the final months of 2007 is the same as the corresponding period of 2006, the CPI for the whole year may reach 8.5%.

Meanwhile, many experts say that the CPI in the last months of 2007 will be higher than that of the same period of last year if the country doesn’t take tougher measures to control inflation, especially measures to withdraw cash from circulation into banks.

Trade deficit is also a big problem for the country. At present import revenue is $6.4 billion compare to $2.8 billion of export revenue. The trade deficit of the first eight months of 2007 is higher than that of the whole 2006 and it may exceed $9 billion for the whole of 2007.

Source: TBKTVN