Vietnam’s 2015 GDP marks five-year high, inflation at 14-year low

HO CHI MINH CITY - With 7% growth recorded in the fourth quarter of 2015, Vietnam achieved an impressive GDP growth rate of 6.68% for the full year while inflation hit a 14-year low at just 0.6% on falling fuel prices. Manufacturing (expanding 10.6% in 2015 vs. 8.5% in 2014) remained a key growth driver, together with resilient domestic consumption and a recovering property market.

Vietnam Asset Management  (VAM) says a remarkable recovery in domestic demand helped offset external weakened demand.

“The banking sector also sent positive signals with credit growth reaching 18% for FY2015 vs. 14% in 2014, system-wide NPLs having been brought to below 3% and the consolidation process showing concrete progress (four weak commercial joint-stock banks have been merged with stronger ones and the three weakest have been nationalised),” VAM says.

But currency devaluation (the VND depreciated about 5% against the USD in 2015) was still a major concern.

“A full-year trade deficit estimated at US$3.2 billion added further pressure on the VND in the context of significant devaluations of the RMB and regional currencies. However, the State Bank of Vietnam (SBV) generally did a good job during the year in handling the situation.” www.vietnamam.com (ATI).