Last update 14:51 | 02/02/2015
The European Union (EU) expects it and Vietnam can soon conclude negotiations over a free trade agreement (FTA), and this will make it possible for the EU to recognize Vietnam as a market economy, said the Ambassador and Head of the EU Delegation to Vietnam.
Speaking to the Daily at a press conference on the 25th anniversary of the EU-Vietnam diplomatic relations held in Hanoi on January 29, Franz Jessen said he hoped that the FTA would lead to changes in Vietnam’s economic structure.
Jessen said Vietnam would be able to meet criteria for a market economy after FTA negotiations are wrapped up.
Vietnam has repeatedly requested the EU to recognize it as a market economy in the past years but has yet to succeed despite a number of nations worldwide have announced their recognition.
Jessen said the EU did not hesitate to give a market economy status to Vietnam and will announce this once Vietnam satisfies its technical criteria for a market economy.
According to Jessen, the Vietnamese economy has improved in recent times and the Government has strived to make changes. However, meeting the criteria for a market economy cannot be done overnight as this will take time to adapt and make changes.
The latest round of negotiations for the FTA took place in Belgium over one week ago and both sides will need one more round before they consider signing the trade agreement.
Jessen described the results of negotiations as positive, saying the two sides would end FTA talks soon.
Jessen expected the FTA will foster bilateral relations and help Vietnam boost internal reforms which the country’s leaders are determined to do. Both sides need to closely cooperate in government procurement and use of State funding transparently and effectively for the sake of Vietnamese people.
The EU has recently announced more non-refundable aid for Vietnam, increasing from 300 million euros to 400 million euros in the 2014-2020 period regardless of the tight fiscal policy in Europe.
The EU together with its member states has become the biggest provider of grants for Vietnam.
To mark the 25th anniversary of establishment of diplomatic ties, a series of activities will be organized throughout the year. They include events for youths, public forums with the participation of scholars from Europe, film and music festivals, seminars, a writing contest about the EU for young people in Vietnam to write about their feelings, understanding and thinking about the EU and EU-Vietnam relations.
The activities will be held by the EU Delegation in Vietnam in coordination with Vietnam’s Ministry of Foreign Affairs, European cultural centers and EU-funded project operators.
Last update 14:54 | 02/02/2015
Saigontourist Holding Company and Saigontourist Travel Service Company are preparing procedures for equitization this year.
Tran Hung Viet, general director of Saigontourist Holding Company, unveiled the equitization plans at a review meeting in HCMC yesterday.
Saigontourist served more than 2.15 million tourists last year, up 6.8% compared to 2013. The company’s revenue rose 7.1% to nearly VND16.4 trillion (US$766.7 million) and profit increased 4.3% to VND4.5 trillion.
The corporation now operates a chain of hotels and resorts, travel agencies and multiple subsidiaries active in the services sector. Occupancy at its hotels nationwide averaged out at 60.5% last year.
Saigontourist Travel Service Co. contributed VND3.1 trillion to the holding company’s revenues last year. It served 650,000 foreign and local visitors, up 25% year-on-year, and its revenue was VND400 million higher than in 2013.
Viet said the corporation will complete divestments from securities, banks and investment funds by the end of this year.
Saigontourist has pulled capital out of Cholon and Saigontourist securities companies, Vietcombank Investment Fund, Can Gio Tourism Urban Area Joint Stock Company, and Kien Long and Orient commercial banks.
Monday, 02/02/2015 - 05:03 PM (GMT+7)
Production and consumption continues to be improved
NDO - The National Financial Supervisory Commission (NFSC) has forecast that the national economic growth rate will reach 5.4% in the first quarter of 2015 and the growth rate for the whole year will be likely to come to 6.2%, according to the NFSC's report on Vietnam's economic outlook in 2015.
The report showed that inflation in 2015 will remain at a low level, due to the declines in oil and commodities prices in the world market, to stand at around 3%.
According to the report, production and consumption continues to be improved with the industrial production index in January 2015 having recorded a 17.5% year-on-year increase and total retail sales in January seeing an 11.95% year-on-year increase.
NFSC also affirmed that business and investment confidence in Vietnam has been strengthened and maintained thanks to the Government's commitments and efforts to reform administrative procedures and institutions in a bid to improve the business environment. The Business Climate Index (BCI), released by the European Chamber of Commerce in Vietnam for the fourth quarter of 2014, increased from 74 to 78 points, the second highest level since 2010.
NFSC said that the decrease in CPI in 2015 will be a chance to consider the price reduction of several types of goods without creating many changes to the market and the economy. The decline in oil prices is also a good opportunity for lowering transport costs, making good impacts on production and consumption.
The commission also recommended lower interest rates to continue to support enterprises in addition to a flexible monetary, fiscal and exchange rate policy.
Last update 07:50 | 28/01/2015
VietNamNet Bridge – Nation should stop sacrificing its growth rate for stabilising the economy, Tran Hoang Ngan with the National Advisory Council on Monetary and Financial Policies, tells Viet Nam Economic Times.
2014 was the first time in three years Viet Nam achieved its GDP goal. What are your comments on this success?
In my opinion, it is notable. It shows that our economy is on the road to recovery. In 2012, our growth rate was 5.25 per cent. In 2013 it was 5.42 per cent, and in 2014 it was 5.9 per cent, compared with the set target of 5.8 per cent. However, if we look at the country's growth rate over the past four years, in the context of our natural resources, a population of 90 million people who are intelligent and hard working, and stable policies, a growth rate of less than 5.7 per cent should be considered beneath our potential.
In the last four years, we have had to sacrifice our high growth rate for macroeconomic stabilisation and inflation control. But now our economy has evolved, and it is high time for us to stop sacrificing. The 5.7 per cent growth rate and maintaining a low inflation rate during the past three years have helped raise Viet Nam's international prestige. For 2015, Viet Nam set a growth rate of 6.2 per cent. In my opinion, this goal is doable. However, the growth rate is expected to possibly reach 6.5 per cent, on the grounds that we still have a lot of potential for development.
Do you think the high growth rate could upset the stable macro economy we have tried so hard to maintain over the last four years?
Since 2012, we have been successful in capping inflation. In 2012, the inflation rate was 6.81 per cent. In 2013 it was 6.04 per cent. In 2014 it dropped to 1.84 per cent. However, for 2015, the Government set the inflation rate at about 5 per cent. In my opinion, the rate should be between 5 and 6 per cent this year, so we can support our development. After reviewing Viet Nam's socio-economic development in the past 30 years, I can say an inflation rate between 5 and 7 per cent is appropriate for us. That inflation rate, on the one hand, will help our economic development. On the other, it will help us stabilise our macro economy.
Don't you think a high goal for our economic growth rate could have a negative impact on our economic restructuring process?
I couldn't agree more. There are quite a few weak things happening in the ongoing economic restructuring process. However, promoting a high economic growth rate and economic restructuring always accompany each other, despite some constraints. Yet, I should say, certain successes were achieved in the past few years. For example, in the public investment sector, fragmented investment, waste and the Incremental Capital Output Ratio (ICOR) dropped to 5.03 in 2014 from 6.2 per cent in 2010. I'm confident that when the new Law on Public Investment goes into effect this year, the picture for our public investment sector will look brighter.
During the process of restructuring our State-owned enterprises (SOEs), more than 140 SOEs have been equitised. Meanwhile, commercial bank restructuring has been on the right track, and we have been handling bad debt well. This offers a solid foundation for Viet Nam to achieve a high economic growth rate.
Do you have any worries about the economy?
What worries me about our economy is if we should continue to open it up or if should we stop. There are signs that the world economy is being restored, but it's a slow process. On the other hand, there appear to be many complicated issues in the world that might threaten global economic development. Meanwhile, our trade is quite open, so it's very possible that negative things happening in the world could have an impact on our economy.
In light of all this, I suggest we be cautious. It is projected that in 2015, we will achieve an export turnover of $148 billion and import turnover of $146.5 billion. So our import-export turnover will be about $294 billion, compared with our total GDP of $200 billion. In other words, our economy will be about 47 per cent open. If our economy continues to become more open, our enterprises will face more difficulties, as their competitiveness is still low. This is a factor that will prevent our economy from developing in a sustainable manner.
Last update 11:00 | 28/01/2015
VietNamNet Bridge - According to the latest figures published by Nielsen market research firm, 85 out of 100 Vietnamese people are changing their consumption habits.
Last year, Vietnamese people spent a large part of their income to maintain basic personal life instead of spending on other items such as luxury goods or electronic product.s
Last year, Vietnamese people spent a large part of their income to maintain basic personal life instead of spending on other items such as luxury goods or electronic products, according to Nielsen's survey.
Specifically, 62-63% of the survey participants cut spending for clothing and outside entertainment services. These are the two group of demands cut the most. In addition, people tried to use less power and gas.
Spending on cellphones and high-tech products or meals at restaurants was also cut by over 40% of population.
About 20% of the participants spent less for daily necessities, through the use of cheaper products or lack of use.
About 22% of them quit smoking to save money; 21% used food products of cheaper price; and 16% were willing to drink wine brands at softer prices.
Compared to neighboring countries, Vietnam was one of the most economical countries.
Notably, the people of the middle class tended to spend more money than ever before. However, the survey also showed that Vietnamese were becoming more "intelligent" in shopping. At least 83% of people made comparisons of similar products before purchase, 81% were confident about knowing the price well and 55% always checked prices carefully.
Besides the price, the quality of goods was an important factor as 73% of respondents said they would pay more for good products.
Another interesting point is that the majority of consumers tended to increase spending for children.
Tuesday, 27/01/2015 - 05:43 PM (GMT+7)
Vietnamese Ambassador to Egypt Dao Thanh Chung (centre) speaks at the dialogue. (Credit: VOV)
NDO/VNA – Egyptian investors showed strong interest in Vietnam’s business market during a dialogue jointly organised by the Vietnamese Embassy in Egypt and the Chamber of Commerce of Alexandria city in Cairo on January 26.
With the participation of representatives from 17 local firms in various fields, the event was part of focused activities organised by the Embassy to introduce and promote Vietnamese products to a five million population market, said Vietnamese Ambassador to Egypt Dao Thanh Chung.
Vietnamese trade counsellor in Egypt, Pham The Cuong, also briefed local businesses on highly potential fields in Vietnam, such as agro-forestry-fishery product cultivation and processing, garment-textiles, leather footwear, rice and furniture production.
General Director of the Egyptian engineering company Heshem Tawfik hailed Vietnam’s strategic vision, praising the efficient and well co-ordinated event.
In 2014, trade between the two countries was valued at US$320 million, a substantial increase from US$220 million in 2013. The figure is expected to increase even more reaching US$400 million this year.
Last update 11:20 | 26/01/2015
Vietnamese people spent at least US$3.1 billion for drinking 3.14 billion liters of beer in 2014, excluding imported beer, according to the Vietnam Beverages Association (VBA) released today.
Both the production capacity and consumption level of beer increased in Vietnam, it added. The production capacity of Vietnam increased 8.1 percent against the previous year.
Saigon Beverages Company (Sabeco) accounted for the biggest market share of beer production in Vietnam last year, with 1.3 billion liters. Hanoi Beverages Company (Habeco) followed with 637 million liters.
Other trademarks as Heineken, Tiger, and Huda reached 890 million liters.
However, VBA chairman Nguyen Van Viet rejected the conclusion that Vietnam ranks among the top beer-consumption nations in the world. He attributed that Vietnam consumed on average 30 liters per adult a year, ranking at the 50th place and the average level in the world.
Last year, many beer production project were invested such as the Saigon – Kien Giang Beer factory with the production capacity of 50 million liters a year. Habeco invested a production line of beer tin cans, at the capacity of 60,000 cans an hour.
In 2013, Vietnamese brewers collectively produced 2.9 billion liters of beer, a 7.4 percent increase compared to a year earlier.
Last update 12:04 | 26/01/2015
VietNamNet Bridge – Foreign investors’ excess of sales over purchases in the stock market have been attributed to the appreciation of the US dollar.
Analysts, reviewing the ups and downs of the stock market in 2014, discovered that foreign investors usually helped to increase sales when the dollar price rose in value.
Though foreign investors’ trading value accounts for a small percentage of the stock market’s trading value, their decisions always have an impact on the stock market because they affect domestic investors.
Domestic investors fear that foreign investors will withdraw their capital to make money from the greenback appreciation. If so, foreign capital flows to the stock market will fall sharply, they believe.
The problem is that the dollar has been appreciating rapidly within a short time.
The US Dollar Index, which is used to measure the dollar against six other hard foreign currencies, increased by nearly 13 percent in the months from July to December 2014.
The sharp increase in the greenback value showed the strong recovery of the currency after years of fluctuations due to the unstable US economy.
The impressive return of the greenback is attributed to the strong recovery of the US economy.
The US GDP grew by 5 percent in the third quarter of 2014, the highest growth rate in 11 years.
The labor market has warmed up with 400,000 new jobs created in October and November, according to an ADP report.
Meanwhile, the European economies are still in significant difficulties, while the European and Japanese central banks decided to loosen monetary policies. This paved the way for the US dollar to rise.
Foreign investors in Vietnam reportedly sold more than they bought by VND3.6 trillion in August to November, while they bought more than they sold in the first seven months of the year.
The capital flow to Market Vectors Vietnam ETF (V.N.M) also reportedly decreased sharply in the third quarter, while $52 million was disinvested in the fourth quarter, according to IndexUniverse.
Analysts, while noting that the foreign investors’ moves depend on many other factors including the oil price fall and the year-end portfolio restructuring, said the dollar price hike was still an important reason.
They noted that in 2013, when the dollar price fluctuated with no clear tendencies, foreign investors still bought more than they sold by VND6.8 trillion, despite a bad macroeconomic performance for the year.
In other words, when the US economy had yet to recover and the US dollar was still weak, investors found it attractive to pour money into markets like Vietnam, where they expected high yields.
But as the dollar has recovered, they have sold assets not valued in US dollars to invest in the greenback.
Saturday, 24/01/2015 - 11:35 AM (GMT+7)
NDO – Oil prices as low as US$40 a barrel could add 0.43 percentage points to Vietnam’s economic growth in 2015, according to Minister of Planning and Investment Bui Quang Vinh.
In two different scenarios, if oil prices stand at US$50 and US$60, Vietnam’s growth rate could be increased by 0.31 and 0.27 percentage point respectively, the minister added.
Minister Vinh said lower oil prices will hurt Vietnam’s oil production and Government revenue but gains from lower prices are higher than losses.
He stated that since Vietnam’s imports of refined oil products outstrip its crude exports, the economy can benefit from lower input and transport costs.
He elaborated that revenue from oil exports can fall by 4-5% in the short term but lower fuel prices will stimulate consumption and economic growth in the medium and long term.
Minister of Finance Dinh Tien Dung shared Minister Vinh’s view, citing some analysis that sharp falls in oil prices will give way to a new period of global economic boom beneficial to the Vietnamese economy.
Earlier, Prime Minister Nguyen Tan Dung said that the price regulation must harmonise with the interests of the State, enterprises and consumers.
He urged the Ministry of Finance to work with the Ministry of Transport and relevant ministries to work out measures to bring down transport costs in line with reductions in fuel prices.
The prime minister requested that transport costs be slashed before the Lunar New Year, which falls in mid-February.
Monday, 19/01/2015 - 04:36 PM (GMT+7)
Saigon Port in Ho Chi Minh City
NDO – Ho Chi Minh City was the largest contributor to Vietnam’s export revenue in 2014 with US$31.352 billion, accounting for 21% of the country’s total.
The addition of US$1.854 billion to 2014 revenue helped Ho Chi Minh City become the first locality in Vietnam to post an export revenue exceeding US$30 billion.
According to the General Department of Customs, in 2014 there were 23 provinces and cities with their respective export earnings surpassing US$1 billion, up 5 localities from 2013.
The northern province of Bac Ninh maintained its second place in 2014 but its revenue was down nearly US$4 billion in comparison with the previous year.
In contrast, export revenue of Thai Nguyen province shot up to US$7.927 billion compared with US$246 million in 2013, thanks to investment in a new Samsung factory.
In 2014, Vietnam exported goods worth an estimated US$150 billion and its imports were valued at US$148 billion, gaining a trade surplus of US$2 billion.