Taking Stock, July 2017 : An Update on Vietnam’s Recent Economic Developments

A broad-based recovery in global economic activity has been taking hold since late 2016. Industrial production has picked up and global trade accelerated after two years of pronounced weakness. A gradual recovery in commodity prices diminished grow...

Full description

Bibliographic Details
Main Author: World Bank
Format: Report
Language:English
en_US
Published: World Bank, Hanoi 2017
Subjects:
Online Access:http://documents.worldbank.org/curated/en/737821500266516655/Taking-stock-an-update-on-Vietnam-s-recent-economic-developments-special-focus-towards-a-high-quality-fiscal-consolidation
http://hdl.handle.net/10986/28114
id okr-10986-28114
recordtype oai_dc
spelling okr-10986-281142021-05-25T09:49:17Z Taking Stock, July 2017 : An Update on Vietnam’s Recent Economic Developments World Bank ECONOMIC GROWTH ECONOMIC OUTLOOK FISCAL TRENDS MONETARY POLICY FOREIGN DIRECT INVESTMENT EMPLOYMENT RISKS LABOR MARKET REVENUE MANAGEMENT PUBLIC DEBT A broad-based recovery in global economic activity has been taking hold since late 2016. Industrial production has picked up and global trade accelerated after two years of pronounced weakness. A gradual recovery in commodity prices diminished growth constraints among commodity exporters, including major emerging economies. Despite heightened policy uncertainty, growth in major advanced economies, including the United States, the European Union, and Japan, has strengthened, reflecting buoyant domestic demand and rising exports. Growth in developing East Asia and Pacific (EAP) continues to be resilient as already robust domestic demand was supported by a pickup in external demand and a gradual recovery in commodity prices. After a large surplus in 2016, Vietnam’s external current account balance started to decline in early 2017. Robust growth in exports, tourism receipts, and private remittances led to a current account surplus of about 4 percent of GDP in 2016, marking the sixth consecutive year of a widening current account surplus. The financial account also saw large net inflows of foreign direct investment (FDI) and long-term loans, allowing the State Bank of Vietnam to gradually rebuild foreign reserves. The current account surplus started to decline in early 2017 due to a recovery in import growth. Bolstered by a strong external position, the nominal exchange rate has been relatively stable but the real exchange rate continues to appreciate. The reference rate was devalued modestly by 1.23 percent in 2016 and around 1.3 percent year-to-date in 2017. Meanwhile, the real effective exchange rate continued to appreciate by about 5 percent in 2016 and 24 percent since 2010. Real exchange rate appreciation is driven by a large external surplus of the FDI sector, but is a concern for Vietnam’s domestic private enterprises, which continue to face significant external imbalance and competitiveness challenges. This special focus issue is part of two-part series on fiscal reforms. While this installment of the taking stock special topic is focused on specific revenue and debt management options to underpin more sustainable and efficient fiscal management, the December issue will focus on expenditure restructuring. 2017-09-06T19:03:46Z 2017-09-06T19:03:46Z 2017-07 Report http://documents.worldbank.org/curated/en/737821500266516655/Taking-stock-an-update-on-Vietnam-s-recent-economic-developments-special-focus-towards-a-high-quality-fiscal-consolidation http://hdl.handle.net/10986/28114 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Hanoi Economic & Sector Work Economic & Sector Work :: Economic Updates and Modeling East Asia and Pacific Vietnam
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic ECONOMIC GROWTH
ECONOMIC OUTLOOK
FISCAL TRENDS
MONETARY POLICY
FOREIGN DIRECT INVESTMENT
EMPLOYMENT
RISKS
LABOR MARKET
REVENUE MANAGEMENT
PUBLIC DEBT
spellingShingle ECONOMIC GROWTH
ECONOMIC OUTLOOK
FISCAL TRENDS
MONETARY POLICY
FOREIGN DIRECT INVESTMENT
EMPLOYMENT
RISKS
LABOR MARKET
REVENUE MANAGEMENT
PUBLIC DEBT
World Bank
Taking Stock, July 2017 : An Update on Vietnam’s Recent Economic Developments
geographic_facet East Asia and Pacific
Vietnam
description A broad-based recovery in global economic activity has been taking hold since late 2016. Industrial production has picked up and global trade accelerated after two years of pronounced weakness. A gradual recovery in commodity prices diminished growth constraints among commodity exporters, including major emerging economies. Despite heightened policy uncertainty, growth in major advanced economies, including the United States, the European Union, and Japan, has strengthened, reflecting buoyant domestic demand and rising exports. Growth in developing East Asia and Pacific (EAP) continues to be resilient as already robust domestic demand was supported by a pickup in external demand and a gradual recovery in commodity prices. After a large surplus in 2016, Vietnam’s external current account balance started to decline in early 2017. Robust growth in exports, tourism receipts, and private remittances led to a current account surplus of about 4 percent of GDP in 2016, marking the sixth consecutive year of a widening current account surplus. The financial account also saw large net inflows of foreign direct investment (FDI) and long-term loans, allowing the State Bank of Vietnam to gradually rebuild foreign reserves. The current account surplus started to decline in early 2017 due to a recovery in import growth. Bolstered by a strong external position, the nominal exchange rate has been relatively stable but the real exchange rate continues to appreciate. The reference rate was devalued modestly by 1.23 percent in 2016 and around 1.3 percent year-to-date in 2017. Meanwhile, the real effective exchange rate continued to appreciate by about 5 percent in 2016 and 24 percent since 2010. Real exchange rate appreciation is driven by a large external surplus of the FDI sector, but is a concern for Vietnam’s domestic private enterprises, which continue to face significant external imbalance and competitiveness challenges. This special focus issue is part of two-part series on fiscal reforms. While this installment of the taking stock special topic is focused on specific revenue and debt management options to underpin more sustainable and efficient fiscal management, the December issue will focus on expenditure restructuring.
format Report
author World Bank
author_facet World Bank
author_sort World Bank
title Taking Stock, July 2017 : An Update on Vietnam’s Recent Economic Developments
title_short Taking Stock, July 2017 : An Update on Vietnam’s Recent Economic Developments
title_full Taking Stock, July 2017 : An Update on Vietnam’s Recent Economic Developments
title_fullStr Taking Stock, July 2017 : An Update on Vietnam’s Recent Economic Developments
title_full_unstemmed Taking Stock, July 2017 : An Update on Vietnam’s Recent Economic Developments
title_sort taking stock, july 2017 : an update on vietnam’s recent economic developments
publisher World Bank, Hanoi
publishDate 2017
url http://documents.worldbank.org/curated/en/737821500266516655/Taking-stock-an-update-on-Vietnam-s-recent-economic-developments-special-focus-towards-a-high-quality-fiscal-consolidation
http://hdl.handle.net/10986/28114
_version_ 1764466354996379648