Economy - overview Vietnam is a poor, densely populated country that has had to recoverfrom the ravages of war, the loss of financial support from the old SovietBloc, and the rigidities of a centrally planned economy. Substantial progresshas been achieved over the past 10 years in moving forward from an extremelylow starting point. Economic growth continued at a strong pace during 1996with industrial output rising by 14% and real GDP expanding by 9.4%. Foreigndirect investment rose to an estimated $2.3 billion for the year, up by about30% from 1995. These positive numbers, however, masked some major difficultiesthat are emerging in economic performance. Many domestic industries, includingcoal, cement, steel, and paper, reported large stockpiles of inventory andtough competition from more efficient foreign producers. Vietnam's trade deficitwidened to $4 billion in 1996, up over 80% from a year ago. While disbursementsof aid and foreign direct investment have risen, they are not large enoughto finance the rapid increase in imports and it is widely believed that Vietnammay be using short-term trade credits to bridge the gap - a risky strategythat could result in a foreign exchange crunch during 1997. Meanwhile, Vietnamese authorities continue to move very slowly toward implementing the structuralreforms needed to revitalize the economy and produce more competitive, export-drivenindustries. Privatization of state enterprises remains bogged down in politicalcontroversy, while the country's dynamic private sector is denied both financingand access to markets. Reform of the banking sector is proceeding slowly,raising concerns that the country will be unable to tap sufficient domesticsavings to maintain current high levels of growth. Administrative and legalbarriers are also causing costly delays for foreign investors and are raisingsimilar doubts about Vietnam's ability to maintain the inflow of foreign capital.Ideological bias in favor of state intervention and control of the economyis slowing progress toward a more liberalized investment environment.

GDP purchasing power parity - $108.7 billion (1996 est.)

GDP - real growth rate 9.4% (1996 est.)

GDP - per capita purchasing power parity - $1,470 (1996 est.)

GDP - composition by sector
agriculture: 28%
industry: 28%
services: 44% (1996 est.)

Inflation rate - consumer price index 4.5% (1996)

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

Unemployment rate 25% (1995 est.)

Budget
revenues: $4.67 billion
expenditures: $5 billion, including capital expenditures of $1.36 billion (1995 est.)

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

Industrial production growth rate 14% (1996 est.)

Electricity - capacity 5.32 million kW (1994)

Electricity - production 11.78 billion kWh (1994)

Electricity - consumption per capita 154 kWh (1995 est.)

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, rice, marine products, coffee, rubber, tea, garments, shoes
partners: Japan, Singapore, Taiwan, Hong Kong, France, South Korea

Imports
total value: $11.1 billion (f.o.b., 1996 est.)
commodities: petroleum products, machinery and equipment, steel products, fertilizer,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 toRussia; $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 for1997

Currency 1 new dong (D) = 100 xu

Exchange rates new dong (D) per US$1 - 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 1997 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Vietnam Economy 1997 information contained here. All suggestions for corrections of any errors about Vietnam Economy 1997 should be addressed to the CIA.