Vietnam sets economic targets for 2017

By June 22, 2016 | 03:41 am PT

Vietnam aims to reach an annual economic growth rate of 6.8 percent next year through higher labor productivity and competitive capacity, according to the framework of a socio-economic development plan for 2017 laid out by the Ministry of Investment and Planning.

The Southeast Asian nation will continue to push economic reforms over the next four years by improving the efficiency of public investment, facilitating banking restructure through mergers and acquisitions of weak commercial banks and quickening state firm privatization, as approved by the Prime Minister.

The country’s policymakers have also set a target of increasing its annual export value by 8 – 10 percent in 2017.

Last year Vietnam’s exports soared to $162 billion from $72.24 billion in 2010.

Over the last five years, Vietnam's exports have more than doubled as cheap labor and low-cost infrastructure have drawn foreign direct investment into the manufacturing sector.

vietnam-lays-out-growth-targets-for-2017

Vietnam's exports are expected to increase significantly in the coming years after the country has concluded a variety of free trade agreements. Photo from the Ministry of Investment and Planning.

As an emerging economy, Vietnam has struggled to keep its trade deficit under control and wants to keep it below five percent of total export value in 2017.

Last year, Vietnam reported a trade deficit of $3.2 billion after three consecutive years of a trade surplus: $749 million in 2012, $300,000 in 2013 and $2.4 billion in 2014.

Following a variety of free trade agreements, Vietnam will continue to tap into potential markets such as the E.U. and member countries of the Trans-Pacific Partnership led by the U.S.

In addition to trimming the trade deficit, the government has also unveiled plans to stop inflation from rising above five percent, keeping the growing budget deficit under control, including raising budget revenues and reining back on public spending.

Vietnam should earn about VND1,165 trillion next year, of which 80 percent will come from domestic tax revenues, said the Ministry of Investment and Planning.

Meanwhile, revenues from oil are expected to account for only four percent of 2017's total budget revenue as slumping crude oil prices take their toll.

Government statistics show that crude-related revenue, which made up 30 percent of the nation’s budget in 2005, fell to 20 percent in 2010 and accounted for about 10 percent in 2015.

Policymakers also aim to keep the unemployment rate in urban areas under four percent and expand social health insurance to covering 77 percent of the population from the current rate of around half.

> Prime Minister wants GDP at 6.7 percent this year

> Vietnam targets GDP growth of 7 percent over next 5 years

> Vietnam’s 2016 GDP growth revised down to 6.2 pct: World Bank