Vietnama s central bank said it will keep its benchmark interest rate unchanged for a ninth consecutive month in September as it strives to boost lending.
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Vietnamese central bank to keep interest rate at 8 pct
As an emerging economy, the regulatory landscape in Vietnam is dynamic, characterized by frequent changes in laws and regulations. Very often, the head office finance team is unsure whether the myriads of regulations in Vietnam are fully complied with, and is also troubled by the quality of financial and management reporting by their Vietnamese accountants.
Vietnam had an average growth in GDP of 7.1% per year from 2000 to 2004. The GDP growth was 8.4% in 2005, the second largest growth in Asia, trailing only China’s. Government figures of GDP growth in 2006, was 8.17%. According to Vietnam’s Minister of Planning and Investment, the government targets a GDP growth of around 8.5% for 2007.
- Vietnam expanded its export market by reducing import duties to zero to 5% in 2006 and has agreed to remove them completely by 2015.
- Vietnam has created a bid market to attract foreign investors not only from its Asean partners but also from outside the trading bloc, especially Europe and America.
- Vietnam has faced challenges, however, including intense competition from other Asean member countries. For instance, farmers have suffered from agricultural imports from China and Thailand.
- Fluctuations in regional markets have had a sudden and severe impact on the domestic market, especially in the financial sectors and on petroleum and investment capital.
- Vietnam’s state revenues suffered from a drop in business profits and tax contributions.
- The real-estate market froze and the labour market destabilized, reducing the number of employees in industrial zones, with many returning to rural areas.
- Pollution has become a problem because foreign investors had transferred underdeveloped or outdated technology without proper controls, and investment had been often approved at any cost.
Education has always had a central role in Vietnam culture and society. It is seen as the avenue of advancement and families routinely sacrifice much to ensure their offspring get the required education. The government of Vietnam has for some time set the priority of education in terms of its budget. Currently, education occupies approximately 20% of all state budget expenditures and accounts for 5.5% of GDP (source: Department of Finance and Planning, MOET, 2008).
