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Vietnam Today

NFSC sees challenges for economy

Released at: 21:53, 30/10/2015

NFSC sees challenges for economy

National Financial Supervisory Commission believes growth may slow due to internal and external factors.

by Hung Nguyen

The National Financial Supervisory Commission (NFSC) has released a report on Vietnam’s economic situation for October and the first ten months of the year, together with forecasts for 2016.

The NFSC believes economic growth over the remainder of the year will slow down due to fluctuations in the global economy, the lack of progress in Vietnam’s economic restructuring, and policy space (fiscal and monetary policy) being narrower. In 2016 Vietnam will face greater challenges in economic growth, with the NFSC predicting GDP growth of 6.5 to 6.7 per cent. 

Industrial sector important

GDP in the first nine months reached 6.5 per cent, with the NFSC writing that the manufacturing and construction sector was the major contributor, with GDP growth of 9.57 per cent, which is nearly double the 5.75 per cent recorded in the same period last year.

Meanwhile, growth in the service sector remained largely unchanged year-on-year, while the agriculture, forestry and fisheries sector saw growth fall from 2.94 per cent to 2.08 per cent.

The Index of Industrial Production (IIP) in the first ten months rose 9.7 per cent, significantly higher than in the same period last year, when it was 6.69 per cent. Assembly and mechanical engineering increased 10 per cent; 2.6 per cent higher than the 8.4 per cent in the same period last year. Export orders in the region are low, however, and have fallen for four consecutive months.

Financial system stable

The banking system in the first ten months saw stable liquidity growth and risk provisions also increased. In October liquidity increased, with the loan-to-deposit ratio (LDR) remaining at 80 per cent, with capital mobilization and foreign credit granting also recording an LDR of 85 per cent. 

The credit structure has moved from long and mid-term loans to short-term loans.

Though credit growth is solid, the net interest margin (NIM) slightly increased, but because of banks increasing their risk provisions the return on equity (ROE) and return on assets (ROA) fell.




2015 (Based on Jan-Oct)













Financial markets began to recover in October. The market reacted positively to news the TPP had been signed and to positive third quarter business reports from listed companies. Information that the State Capital Investment Company (SCIC) has been directed to divest from SOEs also triggered an upward trend in the market. Foreign investors, meanwhile, bought about $50 million in the stock market in the early weeks of October.

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