Vietnam Economy Seen to Grow 6.7%-6.8% in 2016: Financial Watchdog
Vietnam’s gross domestic product (GDP) is forecast to expand 6.7%-6.8% in 2016, driven by rising investment, exports and improvements in the business investment, the National Financial Supervisory Commission (NFSC) has said in a report.
The commission, which is the government’s financial watchdog, expects inflation at 2%-3% next year and a trade deficit of $4 billion.
Half of Vietnam Firms Ignorant of ASEAN Economic Community
Up to 56.8% of surveyed companies said they did not know and did not care about the ASEAN Economic Community (AEC), which will come into existence within days, according to a survey conducted by PACE Institute of Management. The figures were 40.9% for the Trans-Pacific Partnership (TPP) and 33.4% for the World Trade Organization (WTO).
The survey, answered by 493 business people, 82.7% of whom hold top management positions at their companies, 9.9% holding middle management positions and 7.4% other positions, aimed to see how well Vietnamese companies understand economic integration and the effects of the process on them.
Vietnam Firms Fall out of Race for ACV Stake
Bank for Investment and Development of Vietnam (BIDV) is seeking governmental approval to cooperate with France’s Aeroport de Paris to jointly invest in Airports Corporation of Vietnam (ACV) as it is not qualified to buy a stake in the airport developer due to strict criteria, according the Vietnam Investment Review.
Imex Pan Pacific (IPP), the second Vietnamese firm in the race, has decided to quit just around 10 days after submitting its proposal of buying a 5% stake in ACV to the Ministry of Transport.
Both BIDV and IPP fall short requirements of the ministry, which require equity of at least $2 billion as of the end of 2014 for the potential investor as airport operator, and $5 billion for the investor as financial firm.
Malaysia Group Inks Deal to Build Thermal Power Plant
The Vietnamese Ministry of Industry and Trade and Malaysian Teknik Janakuasa Group on December 29 signed the build-operate-transfer (BOT) contract to build Duyen Hai 2 thermal power plant in the southern province of Tra Vinh.
The plant would have the total investment capital of $2.4 billion, including 80% of loans, and two turbines with the total capacity of 1,200 megawatts. It is the second biggest foreign invested project licensed in 2015 in terms of investment capital, after the $3 billion project of Samsung Display Vietnam in the northern province of Bac Ninh.
The plant, which is expected to go on stream before 2020, will be one of the four thermal power plants in Duyen Hai Power Center.
Vietnam Real Estate Market on Radar of Foreign Players
Foreign direct investment in the local real estate sector is expected to rise in 2016 given the positive property development outlook.
David Blackhall, managing director of VinaCapital Real Estate, said that Vietnam has been on the radar of foreign investors since early 2015, particularly for real estate investment opportunities.
Recent real estate transactions show that the majority of foreign companies investing significant capital in Vietnam are based in Asian countries such as Japan, South Korea, the Philippines, Singapore, Hong Kong, and Malaysia.
4G Boom Unlikely in 2016: Experts
Next year could be just a starting year for the implementation of 4G services in Vietnam, and there may not be a boom in the market in this regard, said representatives of telecom giants Viettel and VNPT at a meeting on 2016 ICT trend of Vietnam on Monday.
“The most important factor that determines the popularization of 4G technology is the price of end-to-end devices,” Ho Chi Dung, technology director of Viettel stated.
Viettel to Raise Registered Capital to $13.4 Billion
Prime Minister Nguyen Tan Dung has allowed Viettel to increase its registered capital in the next five year from 100 trillion dong ($4.46 billion) to 300 trillion dong ($13.4 billion).
Viettel will then have among the largest charter capital of all State enterprises. The group is a leader in the field of telecommunications and information technology and has grown rapidly for many years.
The military-run mobile network operator posted 222.7 trillion dong ($9.9 billion) in revenue in 2015, up 13% from a year earlier, whereas its profit topped 45.8 trillion dong ($2.03 billion), an 8.5% increase from 2014.
Foreign investors pledged to invest $1.5 billion in real estate projects in Ho Chi Minh City, Vietnam’s leading economic engine, in 2015, the largest value over the past five years, according to a report by the city.
Coupled with foreign direct investment (FDI), capital flows to the city’s real estate market have also come from investment funds.
Businesses from South Korea, Malaysia and Japan poured the largest sums into their projects in Vietnam in 2015, with their commitments and disbursements totaling $11.04 billion, accounting for 48.5% of the total, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.
Foreign investors won licenses to start 2,013 projects worth $15.58 billion and raised capital in 814 projects by $7.18 billion in the year to December 20, resulting in a sum of $22.76 billion, up 12.5% from 2014, the FIA said in a report on December 30.
Interest rates in Vietnam are unlikely to drop further in 2016 as demand for funds will stay high and the State Bank of Vietnam (SBV
) needs to balance efforts to keep the foreign exchange rate stable, said SBV Governor Nguyen Van Binh
at an online conference on December 29.
The chief of the central bank noted that official data showed that Vietnam’s inflation was less than 1% in 2015 thanks to the plunge in global commodity prices, but could be as high as 3% if volatile factors are excluded. Meanwhile, inflation is target at 5% in the long term.