Vietnam’s economy in 2011: the impressive figures

The Vietnam Economic Forum VEF of VietNamNet reviews the 10 most impressive figures associated with the most important events that had big impacts on the national economy in 2011.

1. The record high inflation rate of 18 percent

The consumer price index CPI in 2011 increased by 18.13 percent over 2010’s, which is among the highest inflation rates in the world.

In late 2010, the National Assembly decided that the CPI increase in 2011 must not be higher than 7 percent. The goal was then raised in June 2011 to 17 percent

The government has determined to force the inflation rate to 9 percent in 2012.

2. The record dong devaluation of 9.3 percent

On February 11, 2011, the State Bank of Vietnam raised the interbank exchange rate by 9.3 percent, the highest ever dong devaluation. The move aimed to narrow the gap in the dollar price between the official and the black markets.

The State Bank has been applying drastic measures to put the dollar black market in order. Meanwhile, it has threatened to heavily punish the enterprises which quote prices in dollars.

3. 20 percent – the peak deposit interest rate

Though the State Bank stipulated that commercial banks must not pay more than 14 percent per annum in interest rate for deposits, the banks ignored the regulation. Some banks even paid 20 percent per annum for deposits in order to attract depositors. Meanwhile, the lending interest rate was pushed up to 24 or 25 percent, which caused big difficulties for enterprises.

The State Bank then had to apply the “iron discipline” to put everything in order, threatening to dismiss bank directors, if the banks continued breaking the laws and paying high interest rates, which it believed would distort the monetary market.

4. 49 million dong – the record high in the gold market’s history

The gold price in Vietnam began escalating in early August. At first, the gold price escalated to 42-45 million dong per tael. After that, the gold fever attack boomed on August 23, 2011, when the gold price climbed to its peak of 49 million dong per tael, and people rushed to purchase gold for fear that the price would continue rising.

In order to ease the fever, the State Bank decided to sell gold reserves and granted quotas for importing gold.

5. 1000 tons of gold kept among people

The National Finance Supervision in June 2011 announced a shocking figure: the volume of gold kept among people may reach one thousand tons, which is worth 45 billion dollars, a huge capital.

Experts say that it is a great waste that the volume of gold is still being kept at the coffers, while it has not been put into business to make profits.

6. Tax agencies collect 3 trillion dong in tax arrears from auto companies

Honda, Ford, Toyota and GM Daewoo once faced the risk of paying tax arrears worth of trillions of dong. Under the current regulations, if just a part of the sets of car parts imported to Vietnam for local assembling, cannot meet the requirements on the separation level in accordance with the Decision 05, the importers (here auto manufacturers) have to bear the tax rate applied to the complete built unit (CBU) cars of 72-82 percent.

However, the auto manufacturers luckily got out of danger after they appealed to the Prime Minister.

7. Nearly 50,000 businesses got bankrupted in 2011

According to the Ministry of Planning and Investment, by September, nearly 50,000 businesses had stopped operation, stopping paying tax, got dissolved or bankrupted.

The figure represents an increase of 11,000 businesses in comparison with the previous year.

8. Public debt climbs to nearly 50 percent of GDP

According to the Ministry of Finance, the public debt has reached 1375 trillion dong, equal to 58.7 percent of the 2011’s GDP. Meanwhile, the proportions were just 33.8 percent in 2007 and 56.6 percent in 2010.

Experts have warned that if the public debt increases to 70 percent, Vietnam may fall into a crisis.

9. EVN reports the record loss of 10,162 billion dong

The figure was released by the Ministry of Industry and Trade on November 19. The State Audit has affirmed that EVN takes profit because of the bad management.

The noteworthy thing that despite the big loss, EVN’s worker still has the high average wage of 7.3 million dong.

10. Three banks merge

Ficombank, Tin Nghia Bank and Saigon Bank have agreed to merge into Saigon Bank which will officially operate from January 1, 2012.

Source VEF

Tags: Vietnam economic, Vietnam economic growth, Vietnam economy, Vietnam economy 2011