VietNamNet Bridge – The most prestigious financial institutions believe that Vietnam's economy will see a strong recovery in 2015 and that the drop in crude oil prices, though lowering revenue for the state, will help foster production and consumption.
The General Statistics Office (GSO) has announced that the gross domestic product (GDP) grew by 5.98 percent in 2014.
Though the figure represents the highest GDP growth rate since 2011, Vietnamese economists think it was still too low. They said the GDP growth rate did not exceed the 6 percent threshold over the last four years.
Some economists think the 6.2 percent GDP growth rate target in 2015 may be unattainable.
The oil price has dropped by 50 percent over the last six months and could decrease further. Crude oil production contributes 8 percent of Vietnam’s GDP.
An MPI report showed that if Vietnam cuts oil output by 30 percent because of oil price falls, the GDP growth rate would lose 1.2 percentage points.
The continued oil price fall may cause oil and gas firms to hesitate to explore new oil fields, while the implementation of huge foreign- invested projects, capitalized at tens of billions of dollars, including the Nhon Hoi oil refinery in Binh Dinh province, could be delayed.
However, some international financial institutions take a different view.
The Frontier Strategy Group (FSG), a consultancy firm, for example, believes that Vietnam is one of the countries that will enjoy large benefits from the oil price fall, because it will stimulate purchasing power and help businesses increase their profit margin.
According to FSG, under a basic scenario, Vietnam may obtain 6 percent GDP growth rate in 2015. However, if the oil price stays at $70 per barrel, the growth rate would reach 8.5 percent, and if it falls to $50 a barrel, it would lead to a 10 percent growth rate for Vietnam in 2015.
Meanwhile, ANZ Bank, in its report released in December 2014, predicted that the GDP would grow by 5.8 percent in 2015 after obtaining 5.6 percent growth rate in 2014.
The Vietnam News Agency quoted Warren Hogan, chief economist of ANZ, as saying that Vietnam’s economy will be better in 2015 thanks to controlled inflation, higher foreign direct investment and more exports.
ADB has also forecast a 5.8 percent GDP growth rate for Vietnam in 2015.
original source: http://english.vietnamnet.vn/fms/business/121194/foreign-institutions-predict-high-economic-performance-for-vietnam-in-2015.html