Vietnam’s successful effort to get inflation below 20% for 2011 caused the country’s economic growth rate to sink well below last year’s 6.8% — although any developed country would be overjoyed to achieve Vietnam’s 2011 GDP growth that came in at 5.9%.
The consumer price index remained extremely high at 18% in December, but significantly below the summer peak. The government hopes to get the CPI down to 9% next year while maintaining 6% economic growth and cutting interest rates on loans that had risen as high as 25% in 2011.
Four positives for the Vietnam economy:
- Exports are up 33% to $96 billion while imports increased 25% to $106 billion, resulting in a lower trade deficit.
- Foreign currency reserves have improved.
- The budget deficit is 5% of GDP, somewhat below expectations.
- Foreign debt declined from $37 billion to $33 billion — now 42% of GDP.
All of this suggests the business climate in Vietnam will improve significantly in 2012.