Economy - overview Vietnam is a poor, densely populated country that has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally planned economy. Substantial progress has been achieved over the past 10 years in moving forward from an extremely low starting point. Economic growth continued at a strong pace during 1997 with industrial output rising by 12% and real GDP expanding by 8.5%. These positive numbers, however, masked some major difficulties that are emerging in economic performance. Many domestic industries, including coal, cement, steel, and paper, reported large stockpiles of inventory and tough competition from more efficient foreign producers, giving Vietnam a trade deficit of $3.3 billion in 1997. While disbursements of aid and foreign direct investment have risen, they are not large enough to finance the rapid increase in imports; and it is widely believed that Vietnam may be using short-term trade credits to bridge the gap - a risky strategy that could result in a foreign exchange crunch. Meanwhile, Vietnamese authorities continue to move slowly toward implementing the structural reforms needed to revitalize the economy and produce more competitive, export-driven industries. Privatization of state enterprises remains bogged down in political controversy, while the country's dynamic private sector is denied both financing and access to markets. Reform of the banking sector is proceeding slowly, raising concerns that the country will be unable to tap sufficient domestic savings to maintain current high levels of growth. Administrative and legal barriers are also causing costly delays for foreign investors and are raising similar doubts about Vietnam's ability to maintain the inflow of foreign capital. Ideological bias in favor of state intervention and control of the economy is slowing progress toward a more liberalized investment environment.

GDP purchasing power parity - $128 billion (1997 est.)

GDP - real growth rate 8.5% (1997 est.)

GDP - per capita purchasing power parity - $1,700 (1997 est.)

GDP - composition by sector
agriculture: 28%
industry: 30%
services: 42% (1996 est.)

Inflation rate - consumer price index 5% (1997)

Labor force
total: 32.7 million
by occupation: agriculture 65%, industry and services 35% (1990 est.)

Unemployment rate 25% (1995 est.)

Budget
revenues: $5.6 billion
expenditures: $6 billion, including capital expenditures of $1.7 billion (1996 est.)

Industries food processing, garments, shoes, machine building, mining, cement, chemical fertilizer, glass, tires, oil

Industrial production growth rate 12% (1997 est.)

Electricity - capacity 5.32 million kW (1995)

Electricity - production 12.3 billion kWh (1995)

Electricity - consumption per capita 165 kWh (1995)

Agriculture - products paddy rice, corn, potatoes, rubber, soybeans, coffee, tea, bananas; poultry, pigs; fish

Exports
total value: $7.1 billion (f.o.b., 1996 est.)
commodities: crude oil, marine products, rice, coffee, rubber, tea, garments, shoes
partners: Japan, Germany, Singapore, Taiwan, Hong Kong, France, South Korea

Imports
total value: $11.1 billion (f.o.b., 1996 est.)
commodities: machinery and equipment, petroleum products, fertilizer, steel products, raw cotton, grain, cement, motorcycles
partners: Singapore, South Korea, Japan, France, Hong Kong, Taiwan

Debt - external $7.3 billion Western countries; $4.5 billion CEMA debts primarily to Russia; $9 billion to $18 billion nonconvertible debt (former CEMA, Iraq, Iran)

Economic aid
recipient: ODA, $NA
note: $2.4 billion in credits and grants pledged by international donors for 1997

Currency 1 new dong (D) = 100 xu

Exchange rates new dong (D) per US$1 - 12,300 (January 1998), 11,100 (December 1996), 11,193 (1995 average), 11,000 (October 1994), 10,800 (November 1993), 8,100 (July 1991)

Fiscal year calendar year

NOTE: The information regarding Vietnam on this page is re-published from the 1998 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Vietnam Economy 1998 information contained here. All suggestions for corrections of any errors about Vietnam Economy 1998 should be addressed to the CIA.