Table 1: Key macro indicators
|GDP growth (% p.a.)||8.4||8.2||8.5||6.2||5.3|
|Inflation (change in CPI, % p.a.)||8.3||7.5||8.3||23.1||6.9|
|Credit Growth (% p.a.)||31.7||25.4||53.9||25.4||37.7|
(Source: IMF to 2008, 2009 data by GSO)
The table above shows 3 Vietnam’s key macro indicators from 2005 to 2009. GDP growth remained strong throughout the year 2005, 2006 and 2007 with the percentage of 8.4, 8.2 and 8.5 respectively. However, GDP fell sharply in 2008 to just 6.2%. This downturn is traced back to the global financial crisis which reduced export growth, slowing foreign investment inflows and as the consequence GDP decreased considerably. In 2009 GDP continued to go down further to 5.3%.
During this 5 year period, inflation fluctuated. Inflation peaked at 23.1% in 2008 and lowered to the lowest point in 2009 with 6.9%. From 2008, the Government had tightened monetary supply and increased interest rates. These policies and the global economic crisis contributed to a cooling of the economy and a slowing of inflation forces from 2008.
Credit Growth also fluctuated from 2005 to 2009. The reason for the slump of credit growth from 53.9% in 2007 to 25.4% in 2008 is that the Government responded to the economic overheating by credit tightening (decreased monetary supply and increased interest rate).