Ministry of Trade: 10 predictions for 2007

The Vietnam Ministry of Trade has released 10 predictions for the country’s economy during its first year in the WTO, including hotter real estate, a cooler stock market and increased exports.

1 - The economy will grow faster than 2006. The National Assembly has targeted growth of at least 8.2-8.5%. The annual per capita Gross Domestic Product (GDP) could reach over 820US$, surpassing many developing countries’ rates.

2 – Consumer prices will climb moderately from March onwards, though some months may see a dip. Food prices will increase faster than industrial and services prices. In general, 2007’s consumer prices will rise slower than last year’s rate of 6.6%.
Gold prices will generally fluctuate along a sine curve, increasing slightly. US dollars will remain stable towards the Vietnamese dong at the rate of 1US$ to over VND16,200, only appreciating some 1%.
The real estate market will heat up; housing and land prices will rise. Hotels, supermarkets, trade centers, and convenience stores will be built on a wide scale. The stock market will cool and the VNindex will gently float up and down. The market will be worth over 10% of the national GDP. It is currently worth 20% of the GDP.

3 – Domestic consumption will increase faster than the rate of economic growth due to higher incomes and improved distribution outlets.

4 – Investment capital will be worth over 40% of the GDP. Private investment will account for one third of all social investment. Foreign investment will rise.

5 – Industry will continue to develop and 2007 will be the 17th year the sector has posted a double-digit growth rate. The service industry will grow particularly quickly and the industry and construction sectors will thrive.

6 – Exports will increase, especially in foreign-invested areas and in sectors previously hampered by quotas. Export volume will surpass 46 billion US$, accounting for two thirds of the national GDP.
Exports will increase at double the rate of the national GDP. But dumping lawsuits, copyright lawsuits and antibiotic residue checks will escalate. Technical barriers will be higher.

7 – Aggregate state income will rise slowly.

8 – The unemployment rate may rise as many enterprises’ competitiveness will drop when barriers such as technical requirements and high tariffs are eliminated. Poverty alleviation will proceed slower than last year.

9 – Though the number of Chinese tourists visiting Vietnam will continue to drop, the country is expected to receive over 4 million international tourists, 10% more than last year.

10 – Natural calamities and disease will occur. A prolonged and widespread drought could happen and affect agriculture and hydroelectricity output. Disease in cattle and fowls may erupt.

Source: Thanh Nien