Vietnam’s economy ranks 42nd in the world

VietNamNet Bridge – With the gross domestic product (GDP) estimated from purchasing power parity (PPP) calculations equivalent to $322 billion, Vietnam’s economy ranks 6th in Southeast Asia, after Indonesia, Thailand, Malaysia, the Philippines and Singapore.

According to the rankings announced last week by the World Bank, the U.S. remains the largest economy in the world with GDP last year reached $15.7 trillion. It is followed by China with about $12.5 trillion, India with $4.8 trillion and Japan with $4.5 trillion.

Russia overtook Germany to become the 5th largest economy in the world with $3.4 trillion. The figure for Germany is $3.3 trillion.

In Southeast Asia, the biggest economy is Indonesia (16th) with more than $1.223 trillion, followed by Thailand (21st) with more than $655 billion, Malaysia (26th), the Philippines (29th) and Singapore (39th). Vietnam ranks 42nd, behind Singapore, with more than $322 billion dollars.

The World Bank’s rankings of 177 economies is different from the rankings based on nominal GDP of the International Monetary Fund (IMF).

According to the IMF, the U.S. and China still top the list with over $15.7 and $8.2 trillion. The following economies are Japan, Germany, France, England, Brazil and Russia. Vietnam ranks 51st in the list with nominal GDP of over $141 billion.

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Robust recovery continues

Cambodia’s economy is on track to maintain its robust recovery thanks to a cocktail of private sector and government efforts. In 2012, the Asian Development Bank estimated that gross domestic product grew at a rate of 7.2 per cent, an increase from a 2011 International Monetary Fund figure of 6.5 per cent. After suffering from the fallout of the global economic downturn, GDP growth is surging back.

Kang Chandararot, president of the Cambodian Institute for Development Study, attributes much of the success to agricultural production, public investment in infrastructure and recoveries in both the garment and tourist sectors.

“The government role is a leading force, while the private sector followed as business confidence was not strong after the downturn [of 2008 and 2009],” he said.

The ADB predicts  7.2 per cent  growth in 2013 and 7.5 per cent in 2014, figures that are largely contingent on a steady recovery of markets in the European Union and United States.

Contributing factors for growth include Cambodia’s exports, consumer spending and the diversified flow of  foreign direct investment, which reached $1.5 billion in 2012. In its 2013 outlook, the ADB expects the industrial sector to expand by more than 10 per cent as EU demand for Cambodia’s products increase, thanks to preferential access to the market under the Everything but Arms initiative.

The ADB report says that export volume of garment and footwear products to the US may also rise in coming years.

Valued at $2.2 billion, Cambodia’s tourism sector continues to thrive.  In 2012, Cambodia welcomed more than 3.6 million tourists, a 24 per cent rise when compared with 2011.

The export of milled rice in 2012 was about 200,000 tonnes, and is expected to be greater this year. The value of construction projects approved by the Ministry of Land Management, Urban Planning and Construction last year, at a time when the sector was facing the threat of labour shortages, was $2.1 billion – double the amount the year  before.

Both the government and the private sector are making collective efforts to diversify the country’s exports while actively seeking new ways to market the Kingdom’s products, from its temples to its rice.

There is, however, more to be done.

Hiroshi Suzuki, Chief Economist of the Business Research Institute for Cambodia, is positive about sustaining growth through the evolution of Cambodia’s manufacturing base, instead of relying on the garment sector. Suzuki says Cambodia is attracting Japanese investment in automotive parts and electronics manufacturing.

“This type of foreign direct investment is the most important key for development in many Asian countries,” he said.

Moreover, as Cambodia looks toward integrating economically with other ASEAN member states, it has to play catch up when it comes to electricity supply, transport efficiency and infrastructure development.

Some analysts have also warned of unequal development.

“Cambodia’s economy is still fragmented, (there is) no broad-base growth . . . and it is led by unfair competition,” said Chandararot when asked about the challenges for Cambodia’s future growth.

Despite the shortcomings, observers believe that Cambodia’s economy will keep heading in a positive direction over the short and long term.

By May Kunmakara│10 June 2013│The Phnom Penh Post

Vietnam trade deficit rises to USD800m

(MENAFN) Vietnam’s General Statistics Office announced that the country’s trade deficit reached USD800 million for the period between January and April, reported Xinhua News.The country’s export value was up 16.9 percent to USD39.4 billion on a yearly basis for the first four months, while imports rose 18 percent to USD40.2 billion for the same period.The amount of foreign direct investments, which contributes to crude oil exports, amounted to USD25.5 billion.It’s worth noting that the country earned a USD481 million trade surplus for the first quarter.

World Bank revises 2013 growth figures

The World Bank has revised its growth prediction for Cambodia upwards to 7 per cent for 2013, from its January prediction of 6.7 per cent, a revision it attributes to the performance of the Kingdom’s agriculture, tourism and garment sectors.

Cambodia’s outlook is generally positive, according to the World Bank, which expects inflation to remain at 3 per cent in 2013.

Though it has eased slightly, credit growth “continues to raise concerns” for the bank, which called for “close monitoring” of the situation.

“Credit growth . . . has been driven largely by wholesale and retail financing . . . starting in 2011 agriculture financing has eased to 29.2 per cent (year on year) in January 2013, from 34.0 per cent in December 2012, and 34.6 per cent in January 2012,” said the World Bank.

While acknowledging the level of banking integration in Cambodia – demonstrated by the “large presence” of foreign banks – the IMF was also cautious about maintaining effective controls on credit growth.

“Going forward, it is important for Cambodia to manage financial deepening while ensuring financial stability. For that, moderating credit growth and continued supervisory and regulatory improvement would be necessary,” Faisal Ahmed, the IMF representative for Cambodia, told the Post two weeks ago.

Having ceased loans to Cambodia in 2011 after concerns about the forced evictions at Boeung Kak lake, the World Bank told the Post in December last year that it would wait until after this year’s general elections to discuss re-introducing loans.

By Daniel de Carteret │29 April 2013│The Phnom Penh Post

Export values up 21 per cent

Cambodian export values increased more than 21 per cent in the first quarter of this year compared with the same period last year, and officials said the rise was a positive sign for the Kingdom’s economic growth.

According to the Ministry of Commerce’s export data obtained by the Post yesterday, exports reached over $1.65 billion in the first three-month period this year, up from the goods exported during the same period last year, valued at $1.36 billion.

The revenue of exports including manufacturing products, milled rice and agro-industrial products such as cassava amounted to $289.2 million more than the first quarter of the previous year.

The figure was supported by a sharp rise of exports in agricultural products, which increased 41.52 per cent to $147.1 million in the first quarter of this year compared with $103.9 million in the same period last year.

The garment sector saw a 16 per cent increase in exports to $1.34 billion this year compared with last year’s $1.15 billion, according to the data.

Nguon Meng Tech, director general of the Cambodia Chamber of Commerce, attributed the garment sector’s success to long-term government support, and said the government’s policy helped attract investors to the country.

“There is good potential for investors in Cambodia due to our political stability,” he said. “When we have more investment, we can create jobs for our people.”

He noted that while some investors were initially afraid of doing business in Cambodia, they were swayed when they saw the stability of Cambodia’s economy.

Another factor leading to export growth, Meng Tech said, was increased direct access to international markets, as Cambodian products had previously been primarily exported only to neighbouring countries before shipping internationally.

“Previously we sold paddy rice to Thailand and Vietnam, and now we mill by ourselves, so we take a lot of profits,” he said.

Chan Sophal, president of Cambodian Economist Association, said the figures were positive predictors for Cambodia’s economy in the coming year.

“I believe in this figure because we see there are increases in investments,” he said.

The World Bank recently predicted that Cambodia’s GDP growth would reach 7.0 per cent for this year, up 0.3 percentage points from its last projection in December.

“I believe growth will be higher than 7 per cent this year,” said Sophal. “There are no huge risks for Cambodian goods including garments and agricultural products.”

By Rann Reuy│24 April 2013│The Phnom Penh Post

CLMV’s GDP per capita doubles in last decade

(KPL) The gross domestic product (GDP) per capita based on purchasing power parity (PPP$) of new Asean member states namely Cambodia, Laos, Myanmar and Vietnam, mostly known as CLMV, has doubled in the last decade jumping from 1,055 USD in 2000 to 2,587 USD in 2011.
ASEAN Brief 2012: Progress Towards the Asean Community, released last month by the Asean Secretariat in Indonesia]s Jakarta, also indicates that the GDP per capita of the six old member states -ASEAN 6: Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand – has risen from 3,597 USD in 2000 to 6,743 USD in 2011.
As a result of strong economic growth the extent of absolute poverty (people living on less than $1.25 a day in purchasing power parity terms) in ASEAN declined significantly between 2000 and 2010, from around 45 to 16 per cent in CLMV countries and from around 29 to 15 per cent in ASEAN6.
The ASEAN countries also showed progress in terms of the United Nation’s broader Human Development Index, which rose from 0.635 in 2005 to 0.657 in 2010. The CLMV countries are gradually catching up to the more developed members of ASEAN on this measure, closing the gap from 25 down to 23 per cent.
*We are pleased to note that the work we did over the past years have resulted in positive outcomes in terms of targets met and initiatives implemented. Although there is definitely much work still to be done in achieving increased economic growth and narrowed development gaps, Asean continues to direct its efforts toward improving the welfare and well being of its citizens in unison with the ultimate goal of increasing the region’s share in the global arena,* said ASEAN Secretary General Le Luong Minh.
ASEAN Brief 2012 contains 18 indicators to assess the extent that Asean member states have conversed or diverged over the last decade, focusing on the first two pillars of the Asean economic Community and the Asean Socio-Cultural Community.
These indicators illustrate some of the positive outcomes of economic integration initiatives, for instance: reductions in border restriction, such as tariffs, and beyond-border barriers, including distorting domestic regulations and inadequate infrastructures; increased intra-ASEAN flows of goods and services, investment and tourism; and any tendency towards convergence in prices and income per capita.
They also illustrate some of the positive outcomes relating to socio-cultural characteristics such as poverty incidence, life expectancy and health in general, education opportunities and attainment, and overall level of human development.

IMF forecasts Cambodia’s GDP growth at 6.7 pct this year

PHNOM PENH, April 17 (Xinhua) — Cambodia’s economy is projected to grow by 6.7 percent in 2013 and further rise to 7.2 percent in 2014, according to the International Monetary Fund (IMF) ‘s report released late Tuesday.

The country’s economy is mainly supported by garment industry, tourism, agriculture, real estate and construction.

“The garment and textile sector continues to dominate the economy — accounting for three-quarters of total exports of goods– followed by tourism and agricultural products,” the IMF said in its April 2013 World Economic Outlook.

The report recommended that sustaining strong growth in Cambodia will require further economic diversification and strengthened macroeconomic policies.

It added that removing infrastructure bottlenecks and improving the business climate will remain critical for attracting private investment and for further diversification.

In the report, the IMF predicted that Cambodia’s inflation will be at 4.6 percent in 2013 and 4 percent in 2014.

The IMF’s growth forecast for Cambodia is lower than the prediction by the Asian Development Bank. Last week, ADB said Cambodia’s economic growth is projected at 7.2 percent this year, picking up to 7.5 percent next year as recovery in Europe and the United States takes hold.

It said industry sector is expected to expand by 10.5 percent in 2013, while the service sector is expected to grow by about 7 percent, with strong growth in tourism and real estate activity.

Agriculture is likely to grow by 4 percent, assuming favorable weather.

The government of Cambodia predicted that the country’s economic growth is expected at 7 percent this year, Hang Chuon Naron, Secretary of State of the Ministry of Economy and Finance, said last week.

He said the nation will get out of the classification of a low- income to a lower-middle-income country at the end of this year.

Lower-middle-income countries are those with GDP per capita between 1,006 U.S. dollars and 3,975 U.S. dollars, as defined by the World Bank.

Last year, the country’s GDP growth was recorded at 7.3 percent and GDP per capita was nearly 1,000 U.S. dollars, he said, forecasting that GDP per capita will increase to 1,080 U.S. dollars this year.

By Zhu Ningzhy   |   17 April 2013  |   Xinhua