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Vietnam: Selected Issues and Statistical Appendix

Author(s):
International Monetary Fund
Published Date:
January 2002
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IV. Trade Reforms and Export and Import Performance25

A. Introduction

49. Trade liberalization and export development have been central to Vietnam’s continuing economic transition. To this end, Vietnam has pursued a multi-pronged approach to gradually reducing trade barriers and increasing the outward orientation of the economy. First, by joining the ASEAN Free Trade Area, AFTA, in 1996 Vietnam made a commitment to eliminate tariff and non-tariff barriers vis-à-vis the other member countries. Second, the bilateral trade agreement with the United States is expected to be ratified by the National Assembly in November, and other bilateral trade agreements are under discussion. Third, Vietnam is vying for membership in the World Trade Organization (WTO), which requires a commitment to simplify import controls and reduce the level of import protection. Despite the high degree of trade restrictiveness throughout much of the 1990s, however, both exports and imports expanded rapidly. This reflected generally adequate competitiveness, high levels of foreign direct investment (FDI), and the liberalization of the agricultural sector following Doi Moi By 2001, exports account for half of GDP and are broadly diversified, in terms of structure and trading partners. Vietnam’s openness (measured in terms of the ratio of exports and imports to GDP) is twice the average of all PRGF-eligible countries. This chapter examines the recent trade initiatives, and the decade-long trends in exports and imports.

B. Recent Developments in Trade Reforms

50. During 2001, Vietnam made substantial progress in liberalizing its trade regime. In April 2001, with a view to providing a more stable export-import environment, the government announced a Five-Year (2001–2005) Import-Export Regime.26 This provides a road map for elimination of QRs, tariff reductions, and other trade measures. On October 3, 2001 the U.S. Senate passed legislation implementing the landmark bilateral trade agreement between the United States and Vietnam (the agreement was signed on July 13, 2000) marking an important step toward WTO accession.27 Vietnam’s National Assembly is expected to ratify this agreement when it meets in November. Meanwhile, preparations are being made to reach bilateral trade agreements with other WTO members and align existing bilateral agreements28 and modify Vietnam’s laws to meet WTO standards.

Key trade reforms in 200129

51. Quantitative restrictions: The program for eliminating QRs has been accelerated compared to commitments under the PRGF-supported program:

  • Effective May 1, 2001 QRs on 5 items30—paper, clinker, granite and ceramic tiles, alcohol, and passenger vans with 10-16 seats—were eliminated ahead of schedule and replaced with tariffs (see Table IV. 1).

  • At the same time, the target dates have been advanced for most other items, including construction glass, remaining steel products, and vegetable oil, to end-December 2001 and QRs for two additional items-motorcycles and certain parts thereof and passenger vehicles with up to 9 seats—are now scheduled for removal by end-December 2002.

  • QRs on cement will remain until end-December 2002, as initially planned.

  • By the beginning of 2003, all but 2 items—sugar and petroleum products—will no longer be subject to QRs.

Table IV.1.Vietnam: Schedule for Removal of Quantitative Restrictions on Imports, 2001-03
Item or GroupOriginal DateActual or Revised Date
Paper2001Removed May 1, 2001
Clinker and cement
ClinkerDecember 31, 2001Removed May 1, 2001
CementDecember 31, 2002No change
Construction white glassDecember 31, 2002December 31, 2001
Granite and ceramic tilesDecember 31, 2002Removed May 1, 2001
Remaining steel productsDecember 31, 2002December 31, 2001
Vegetable oilJanuary 1, 2003December 31, 2001
AlcoholNot scheduled for removalRemoved May 1, 2001
Motorcycle (new) and certain partsNot scheduled for removalDecember 31, 2002
Passenger vans
10-16 seatsNot scheduled for removalRemoved May 1, 2001
Up to 9 seatsNot scheduled for removalDecember 31, 2002
Source: Prime Minister Decision 46/2001/QD-TTg on the Management of Import and Export of Goods in the Period 2001–2005.
Source: Prime Minister Decision 46/2001/QD-TTg on the Management of Import and Export of Goods in the Period 2001–2005.

52. Tariff reductions under AFTA: Ordinance No. 28 announced on June 6, 2001 outlines changes in tariff lines consistent with the commitments under AFTA. These changes are effective from January 1, 2001:

  • 713 items have been transferred from the Temporary Exclusion List (TEL) to the Inclusion List (IL), leaving 1,200 items still in the TEL (under AFTA all items are expected to be moved to the IL by 2003).

  • For the items in the IL (a total of 4,986), 65 percent are subject to a tariff rate of 0-5 percent and the remaining 35 percent to a tariff rate of 5-20 percent (under AFTA tariffs on 97 percent of tariff lines will be reduced to at most 20 percent by 2003 and 0-5 percent by 2006).

53. Other measures: In addition,

  • Quotas on rice exports have been eliminated and anyone registered to export food and agriculture-related goods can now export rice freely.

  • Garment and textile quotas will continue to be announced (currently 25 percent of the quota is auctioned off), and will be increased annually and eliminated over the medium term.

  • A revised tariff schedule was announced for 2001, partly to reflect the tariffs for goods on which QRs were removed31 (Statistical Appendix, Tables 32 and 33). Notwithstanding this, only about 1 percent of line items continue to have rates above 50 percent.

  • The surrender requirement has been reduced from 50 percent to 40 percent effective May, 2001.

  • Trading rights have been further liberalized for foreign firms.

  • Foreign invested enterprises can now buy foreign exchange from commercial banks in Vietnam for their imports.

United States Bilateral Trade Agreement (USBTA)

54. Normalization of Vietnam’s trade relations with the United States began with the lifting of the trade embargo in 1994. This move was followed a year later by the restoration of diplomatic relations in 1995, and the first waiver of the Jackson-Vanik emigration provisions in 1998. Under the USBTA expected to be ratified by the National Assembly in November, the U.S. will extend temporary most-favored nation status (MFN, also known as normal trade relations or NTR status) to Vietnam, so that imports from Vietnam will face significantly lower tariffs when entering the United States.32 The USBTA also provides for reciprocal nondiscriminatory treatment of U.S. exports to Vietnam. The key features of the USBTA are:

  • Trading rights: Liberalize trading rights for U.S. firms in three to six years.

  • Tariffs: Reduce current tariff rates on a limited range of industrial and agricultural items (about 250) by 30 to 50 percent over three years.

  • Quantitative restrictions: Remove QRs on most products in three to seven years, but back loaded for steel and cement (after six year) and petroleum products (after seven years).

  • Intellectual property rights: Apply WTO-consistent protection for intellectual rights in 12–18 months.

  • Banking services: Allow U.S. equity in joint ventures (with up to a 49 percent stake). After nine years allow 100 percent U.S. owned subsidiary banks. Also allow U.S. equity in privatized Vietnamese banks at the same levels as Vietnamese investors. Phase in right of U.S. banks to accept dong deposits on the same basis as domestic banks over eight years for business clientele and ten years for retail depositors.

  • Nonbank financial services: Allow 100 percent equity in financial and other leasing after three years.

  • Insurance: Allow joint ventures in three years and 100 percent U.S. equity in five to six years.

  • Other services: Allow immediately 100 percent U.S. equity in a range of technical services, including in legal, accounting, engineering, computer-related, and construction areas.

  • Trade-related investment measures: Phase out all WTO-inconsistent measures (e.g., local content requirements) in five years.

  • Transparency: Publish all laws and decisions governing issues in the agreement, establish administrative or judicial tribunals for review, and provide the right of appeal.

The impact of the USBTA on Vietnam

55. Impact on trade: The major impact is likely to be on exports from Vietnam which will enjoy MFN status. Vietnam’s exports to the United States increased from US$95 million (2.3 percent of total exports) in 1995 to US$770 million (6.7 percent of total exports) in the first 9 months of 2001. The principal exports are seafood, textiles, footwear and agricultural goods, including coffee, most of which are items that under MFN enjoy duty-free treatment (zero tariffs). Thus, the USBTA is likely to result in increases of commodity exports and exports of labor-intensive manufacturing with large differences between the MFN and non-MFN tariff rates. Using the Global Trade Analysis (GTAP) model, the World Bank has estimated that exports to the United States are likely to double in the first year of MFN status, as U.S. tariff rates on Vietnamese exports will fall from their non-MFN average of 40 percent to less than 3 percent.33 In particular, Vietnam’s clothing exports are expected to increase dramatically. Vietnam exported less than US$40 million in apparel to the U.S. in 1999, while garment exports to Japan and the EU totaled US$500 million and US$640 million, respectively. Based on the experience of Cambodia-which was granted MFN status in 1996 the World Bank estimates that clothing exports could increase as much as ten-fold in the first year after receiving MFN status.34 Another item likely to benefit from the USBTA are marine exports from Vietnam. The U. S. has already outpaced Japan to become the biggest importer of seafood from Vietnam accounting for 27.2 percent (or USS324 million) of total exports of seafood from Vietnam in the first nine months of 2001.

56. Impact on services and capital flows: The liberalization of the services sector, including tourism and construction in the short-term and financial services, including banking and insurance services over the medium-term, are likely to lead to a considerable increase in foreign direct investment (FDI). Also, FDI in light industry has been rather modest to date and this is likely to benefit from the USBTA.

57. Impact on the SOE sector and factor productivity: SOE enterprises in the textile and footwear sectors are already facing increased competition from China and private domestic firms that have been forming joint ventures with foreign partners. The further opening up of the economy combined with other ongoing trade reforms35 is bound to increase competition and force restructuring on the SOE sector. Also, increased capital inflows are likely to increase investment in textiles, food processing and fisheries, all of which have a large potential but have hitherto seen relatively small foreign investment.

C. Export Performance in the 1990s

58. Vietnam’s exports have increased almost five folds in the last 8 years, from about USS3 billion in 199336 to over USS14 billion in 2000 and are expected to top US$15 billion in 2001. Exports are now broadly diversified in structure and in trading partners. During the same period, Vietnam’s openness (measured in terms of exports plus imports as a ratio of GDP) improved relative to its neighbors, with the exception of the Philippines and Malaysia, to reach 94 percent in 2000 (Figure IV. 1). Export performance in the 1990s can be roughly divided into four periods: (i) from 1993-97 when exports were increasing at an average rate of 30 percent; (ii) 1998 when export growth plummeted to only 2.4 percent; (iii) post-1998 when growth rebounded to average 24 percent in 1999–2000, and (iv) recently a slowing of export growth with the global downturn. Based on Vietnam’s export performance over the last decade and assuming maintenance of competitiveness and continued transition to a market economy, Vietnam’s medium-term export outlook remains promising even though the near-term outlook is clouded by the global slowdown.

Figure IV.1.Vietnam: Comparitive Perspective on Trade

Sources: Data provided by the Vietnames authorities; and Fund staff estimates.

1/ Measured as exports plus imports, in percent of GDP.

Rapid export growth prior to the Asian crisis (1993–1997)

59. Vietnam’s export growth was very strong, averaging 30 percent during this period. The contributing factors were the elimination of export barriers (including quotas) in order to encourage sales to convertible currency areas since 1989, adequate competitiveness, some FDI in export-oriented industries, and the steady growth in import demand in most trading partner countries. This record outperforms export growth of most of its Asian neighbors (Figure IV.2) and was accounted for primarily by non-oil exports:

  • Non-oil export growth averaged about 35 percent, with exports of garments and footwear increasing most rapidly and their shares in total exports increasing from 8 percent in 1993 to 15 percent in 1997, and from 2 percent in 1993 to 15 percent in 1997, respectively, replacing coffee and rice as major export earners (apart from oil).

  • Oil export value rose at an average rate of about 14 percent, with most of the increase due to higher export volumes (an increase of 78 percent) with a price increase that was relatively modest (Table IV.2 and Statistical Appendix, Table 25). The share of oil exports continued to remain the largest, averaging about 21 percent of total exports.

  • Export volumes of coffee, rice and rubber continued to increase so that despite fluctuating prices, they remained important in terms of their contribution to growth.

  • Diversification of trading partners also increased. Starting first with regional markets, Vietnam made inroads overtime into European and U.S. markets.

  • The principal trading partner during this period was the Asia and Pacific region which absorbed 70 percent of Vietnam’s total exports until 1995; however starting in 1996 the share of this region has been declining. Japan and Singapore were the main trading partners in the Asian region (Statistical Appendix, Table 27).

  • The share of exports to Germany, United Kingdom and the United States (after the trade embargo was lifted in 1994) steadily increased during this period. As a result, Vietnam has gained market share in these countries. In fact, in 1997 Vietnam’s exports to these countries increased when exports of most Asian countries were declining.

Figure IV.2.Vietnam: Export Indicators

Sources: Data provided by the Vietnamese authorities, and Fund staff estimates.

Table IV.2.Vietnam: Commodity Composition of Exports, 1993-2001 1/(In millions of U.S. dollars, unless otherwise indicated)
1993-9719981999-20002001 1/
AverageAverage
Total exports5,7449,36512,99512,710
(Growth in percent)30.12.424.29.0
Non-oil exports4,6448,13210,1979,918
(Growth in percent)35.45.316.012.5
Composition of exports
Crude oil1,1001,2322,7982,792
(Growth in percent)13.9-13.268.6-1.9
Coal10010295119
(Growth in percent)24.0-8.1-4.0-2.3
Rubber144127156129
(Growth in percent)31.2-33.519.8-2.3
Rice6021,020846337
(Growth in percent)25.817.2-17.1-42.1
Coffee366594543546
(Growth in percent)60.721.0-7.333.4
Marine products5688581,2271,216
(Growth in percent)23.99.930.84.2
Garments7291,4501,8191,707
(Growth in percent)59.97.512.613.7
Footwear3771,0311,4261,527
(Growth in percent)330.16.818.731.1
Handicrafts90111203192
(Growth in percent)33.0-8.348.7-4.9
Electronics440497684522
(Growth in percent)13.031.9-20.5
Other1,6152,3423,1993,623
(Growth in percent)28.1-2.724.923.8
(In percent of total exports)
Crude oil19.113.221.222.0
Coal1.71.10.70.9
Rubber2.51.41.21.0
Rice10.510.96.72.7
Coffee6.46.34.34.3
Marine products9.99.29.39.6
Garments12.715.514.113.4
Footwear6.611.011.112.0
Handicrafts1.61.21.51.5
Electronics7.75.35.24.1
Other28.125.024.528.5
Sources: Vietnamese authorities; and Fund staff estimates.

For 2001, January-October only.

Sources: Vietnamese authorities; and Fund staff estimates.

For 2001, January-October only.

Slump in exports in 1998

Reflecting the adverse impact of the Asian financial crisis in 1997/98 and Vietnam’s close link to the region, exports increased by only 2 percent in dollar terms. Exports suffered across the board and mainly from the terms of trade shock, due both to lower oil prices and a decline in other commodity prices as a fallout from the Asian crisis; and from a relative loss in competitiveness as the dong appreciated in real effective terms, compared to all the other currencies in the region (Figure IV.3):

  • Oil prices fell by 32 percent, so that despite an increase in export volume of 26 percent in 1998, oil export receipts declined by 13 percent.

  • Weak demand for Vietnam’s exports from its Asian neighbors affected by the financial crisis resulted in a decline in exports of 34 percent in 1998 and the share of exports to this region declined by over 20 percentage points.

  • However, the decline in exports to Asia was more than compensated by the near doubling of exports (mainly non-oil) to the European Union and the United States contributing to the small but positive increase in exports compared with most Asian countries that had negative export rates.

Figure IV.3.Vietnam: Exchange Rate Indicators

Sources: Data provided by the Vietnamese authorities; and Fund staff estimates.

1/ Estimated for September and October 2001.

Export rebound (1999–2000)

60. Overall exports increased by an average of about 24 percent in 1999–2000, as the region began to recover from the crisis and also reflecting the dramatic increase in oil prices from about US$11 per barrel in January 1999 to US$28.4 per barrel at end-year 2000.

  • As a result, oil export receipts almost tripled between 1998 and 2000 from USS1.2 billion to USS3.5 billion, respectively.

  • Non-oil exports registered an increase of 16 percent, but this is only half of the average experienced in the mid 1990’s.

  • Among non-oil exports, the share of garments, footwear, handicrafts, and marine products has remained robust.

  • Growth in exports to the European Union and the United States (which are mainly non-oil) was much larger than that to the recovering Asian countries, indicating a continued trend to penetrate these markets following the redirection of trade achieved during the crisis years.

Slowing export growth in 2001

61. With the weakening in the global environment, export growth during the first 10 months of 2001 slowed substantially to only 9 percent, compared with 26 percent during the same period last year. This performance is in line with the slowing of external demand and in keeping with the regional trend of falling export growth; competitiveness has been broadly maintained through flexible exchange rate management and stable domestic prices.

  • Much of the decline can be explained by a decline in oil prices from a peak of USS34 per barrel last November to US$22 per barrel in October this year. Oil export volumes in September and October have also been disrupted (exports from January-August averaged 1.4–1.5 million metric tons) by repairs at some oil wells.

  • Growth in non-oil exports was 12.5 percent in the first 10 months, almost half the growth rate achieved last year although still higher than for most other Asian countries.

  • Among non-oil exports, coffee and garment exports showed a rebound in growth compared to the same period last year while exports of marine products which were growing very rapidly until August seem to have come down quite dramatically in September and October. This may reflect the higher freight insurance costs in the wake of the September 11 events. The slump in non-oil commodity prices has also depressed exports such as coffee and rice.

  • Japan remains the largest importer of Vietnamese exports, with China, Australia, Singapore and United States being the other large buyers of Vietnamese goods.

  • Despite the broad diversification in export structure and trading partners, experience so far in 2001 suggests that Vietnam is now more vulnerable than a decade ago to shifts in global demand and world commodity prices.

D. Import Performance in the 1990s

62. In line with exports, Vietnam’s imports have quadrupled over the past eight years, from about US$4 billion in 1993 to nearly US$12 billion in 1999 and are expected to reach US$14 billion in 2001. Imports seem to have reacted to the Asian crisis faster than exports-perhaps due to administrative controls—with imports declining by 0.4 percent in 1997 compared with the previous year, and to an average growth of 42 percent during 1993-96. Import performance in the 1990s could also be divided into four periods (covering slightly different years): (i) from 1993-96 when imports were increasing rapidly; (ii) 1997-99 when imports plummeted and recovered only slowly towards end-1999; (iii) 2000 when imports increased again rapidly; and (iv) 2001 when imports began slowing.

Strong import growth prior to the Asian crisis (1993–1996)

63. Very rapid import growth during this period (42 percent on average) was associated with a rapid GDP growth and high FDI inflows. This record outperformed import growth of most of its Asian neighbors.

  • With rapid economic growth, petroleum imports increased at an average rate of about 14 percent, while non-oil import growth averaged almost 50 percent (Table IV.3).

  • Among non-oil imports, imports of machinery and equipment increased most rapidly with the share in total imports increasing from 25 percent in 1995 to about 33 percent in 1996,37 driven mainly by the large FDI flows during these years.

  • Imports of textile yarn, and leather and garment material which forms an important input for the export industry also showed significant increases.

  • About 70 percent of all imports came from the Asia and Pacific region; the share of imports from European Union countries averaged about 10 percent (Statistical Appendix, Table 27). The share of imports coming from Taiwan POC and the U.S. steadily increased during this period.

Table IV.3.Vietnam: Commodity Composition of Imports, 1993-2001 1/(In millions of U.S. dollars, unless otherwise indicated)
1993-961997-9920002001 1/
Average.Average
Total imports7,44411,63015,20012,988
(Growth in percent)42.60.329.44.8
Non-petroleum imparts6,66610,63913,14211,434
(Growth in percent)49.30.423.46.2
Composition of imports
Petroleum7789922,0581,554
(Growth in percent)14.11.595.3-4.4
Fertilizer405455509275
(Growth in percent)30.4-7.69.7-23.5
Insecticide 2/7812413788
(Growth in percent)34.814.73.0-6.9
Steel and iron333532812777
(Growth in percent)51.243.238.321.8
Cement 2/8318
(Growth in percent)-3.6-60.7
Motorcycles 2/429331787512
(Growth in percent)2.64.797.2-8.5
Motor cars and trucks 2/152118134
(Growth in percent)4.7-16.150.6
Wheat Flour 2/794616
(Growth in percent)43.1-24.1-44.8
Textile yam 2/146176231198
(Growth in percent)17.97.219.13.2
Cotton 2/7998101113
(Growth in percent)-27.516.411.0-34.9
Leather and garment material2719381,3341,323
(Growth in percent)77.731.321.725.0
Cigarette material 2/8194112
(Growth in percent)-6.06.527.3
Machinery and equipment 2/2,9491,9452,4822,230
(Growth in percent)81.2-13.423.87.2
Electronics 3/639869563
(Growth in percent)36.0-19.7
Other 4/3,7815,8365,6185,531
(Growth in percent)32.39.79.313.6
(ln percent of total imports)
Petroleum10.58.513.512.0
Fertilizer5.43.93.32.1
Insecticide1.01.10.90.7
Steel and iron4.54.65.36.0
Cement1.10.2
Motorcycles5.82.85.23.9
Motor cars and trucks2.01.00.9
Wheat flour1.10.40.1
Textile yarn2.01.51.51.5
Cotton1.10.80.70.9
Leather and garment material3.68.18.810.2
Cigarette material1.10.80.7
Machinery and equipment39.616.716.317.2
Electronics5.55.74.3
Other50.850.237.042.6
Sources: Vietnamese authorities; and Fund staff estimates.

For 2001, January-October only.

Data available only for 1995 and 1996; average growth rate is for 1996 only.

For 2001, January-October only.

Figures are not strictly comparable since commodity composition is non-uniform across years, depending on the breakdown available for different years.

Sources: Vietnamese authorities; and Fund staff estimates.

For 2001, January-October only.

Data available only for 1995 and 1996; average growth rate is for 1996 only.

For 2001, January-October only.

Figures are not strictly comparable since commodity composition is non-uniform across years, depending on the breakdown available for different years.

Import compression in 1997–99

64. The severe impact of the Asian crisis was most evident in the resulting compression of imports. After the dramatic growth in the previous 4 years, imports plummeted, falling by 0.4 percent in 1997 and 0.6 percent in 1998, growing slightly by 0.8 percent in 1999. This was achieved primarily through a tightening of trade and exchange restrictions as the authorities attempted to protect the foreign exchange position, and also through a substantial depreciation of the exchange rate in 1998. Among the main factors that kept imports compressed were:

  • The plummeting of FDI inflows as most of the Asian countries, the principal source of FDI, were hit by the crisis. FDI fell to under 3 percent of GDP in 1997 and 1998 compared with almost 8 percent of GDP in 1996.

  • The tightening of ad hoc exchange controls, including the requirements of consistency with the business registration and funding for imports only by importers’ own foreign exchange, and the imposition of a foreign exchange surrender requirement of 80 percent in 1998.

  • Reflecting both depressed investment and the imposition of quantitative restrictions, imports of key inputs such as steel, cement, and machines, and equipment remained flat, or declined dramatically. Imports of light manufacturing, including leather and garment material and textile yarn, were more resilient as Vietnam was able to redirect exports to the EU.

  • The share of imports coining from the Asia and Pacific region increased marginally during this period; however within this region the share of imports from Singapore have declined steadily and have been replaced by imports from China and Taiwan POC.

  • Imports of FIEs declined by 17 percent in 1998 reflecting the low FDI flows, but increased by almost 30 percent in 1999 as the region began to recover.

Import recovery in 2000

65. With Vietnam’s economic rebound, overall imports grew by 30 percent in 2000.

  • The oil import bill doubled in 2000, reflecting the jump in oil prices from an average of USS18 per barrel in 1999 to almost US$29 per barrel in 2000. Also, demand for petroleum increased reflecting a recovering economy so that volume of imports increased about 18 percent.

  • Along with a pick up in domestic investment, the recovery was also evident in an increase in imports of machinery and equipment, steel and electronics items. At the same time, imports of textile yam and leather and garment material remained robust.

Slowing import growth to date in 2001

66. Import growth has slowed so far in 2000 in tandem with exports. In the first 10 months of 2001, the year-on-year growth in imports fell to only 5 percent, both for oil and non-oil imports.

  • While a decline in oil prices has been a factor, growth in petroleum import volume has also been modest at just over 4 percent, reflecting a slight slowing in Vietnam’s economy.

  • Imports of machinery and equipment declined while steel imports are flattening out indicating slowing investment. Cotton and textile yarn imports are also down reflecting a declining external demand for apparel, especially in the wake of the September 11 events; however, imports of leather and garment material remain robust.

  • Clothing and electronics imports (as final use items) are down despite increases in income levels (given positive real GDP growth), reflecting weaker consumer confidence.

67. Vietnam’s imports appear to have adjusted rapidly in 2001 to relatively modest exchange rate movements and to domestic demand. The Vietnamese authorities have begun to case trade and exchange restrictions and, as noted above, QRs have been removed from several items, and tariffs for AFTA imports have been reduced. The surrender requirement has been progressively reduced, to 40 percent currently. These actions suggest diminished scope for administratively containing imports and greater reliance on market forces to moderate import demand.

Vietnam: Basic Data
Nominal GDP (2000): US$30.3 billionGDP per capita (2000): US$390
Population (2000): 77.7 millionFund quota: SDR 329.1 million
199519961997199819992000
Est.
Real GDP (annual percentage change)9.59.38.23.54.25.5
Industrial output 1/14.514.213.812.511.615.7
Saving-investment balance (in percent of GDP)-13.5-10.5-6.9-4.64.11.7
Gross national saving13.617.621.419.126.527.3
Gross capital formation27.128.128.323.722.425.6
Inflation (annual percentage change)
Period average17.45.73.27.34.1-1.7
End of period13.44.53.68.6-0.2-0.6
GDP deflator17.08.76.611.15.72.5
Government budget (in percent of GDP) 2/
Total revenue22.622.420.019.619.220.7
Grants0.70.60.80.60.60.4
Total expenditure (excluding onlending and capital costs of reforms)23.323.122.620.420.623.1
Of which: current expenditure18.617.416.314.713.915.3
Overall fiscal balance (including grants, excluding onlending)-0.5-0.2-1.7-0.1-0.8-2.0
Money and credit (annual percentage change, end of period) 3/
Broad money22.622.726.125.639.339.0
Credit to the economy26.920.122.616.419.238.1
Interest rates (in percent, end of period)
Three-month deposits (households)18.29.18.19.74.04.3
Short-term lending (less than one year)28.315.912.714.711.79.8
Current account (including official transfers)
(in millions of U.S. dollars)-2,648-2,431-1,664-1,0671,285642
(in percent of GDP)-12.8-9.9-6.2-3.94.52.1
Exports of goods (annual percentage change, U.S. dollar terms)28.241.224.62.423.225.2
Imports of goods (annual percentage change, U.S. dollar terms)41.125.5-0.2-1.11.134.5
Foreign exchange reserves (in millions of U.S. dollars, end of period)
Gross official reserves, including gold1,3231,6731,8571,7652,7113,030
(in weeks of next year’s imports of goods and nonfactor services)5.26.47.26.88.18.6
Net international reserves, including gold8861,0651,2581,1732,1182,191
External debt (in percent of GDP) 4/86.177.774.875.671.639.3
Convertible currency 5/35.035.735.736.334.239.3
Nonconvertible currency51.142.039.139.337.40.0
Debt-service ratio (percent of exports of goods and nonfactor services)
Debt due12.112.912.813.912.811.2
Debt paid6.75.68.18.110.59.9
Exchange rate (dong per U.S. dollar)
Period average11,03811,03311,70613,29713,94414,170
End of period11,01511,15012,29213,89014,02814,514
Real effective exchange rate (annual percentage change)
period average6.56.63.48.1-6.5-2.8
End of period8.93.712.7-9.4-3.12.0
Memorandum items:
GDP (in trillions of dong at current market prices)228.9272.0313.6360.6397.3429.7
Per capita GDP (In U.S. dollars)288337361359372390
Sources: Data provided by the authorities: and staff estimates and projections.

Year-on-year changes in the gross value of industriai output.

Cash basis.

For 2000 based on expanded monetary survey (Slate Bank of Vietnam (SBV) and 89 credit institutions, for previous periods, based on original monetary survey (SBV and 28credit institutions).

London Club rescheduling was concluded in early 1998. Restructuring of the Russian debt was concluded in September 2000. on comparable terms to the 1993 Pans Club rescheduling.

Includes the lean component of foreign direct investment and other private sector borrowing, and short-term debt

Sources: Data provided by the authorities: and staff estimates and projections.

Year-on-year changes in the gross value of industriai output.

Cash basis.

For 2000 based on expanded monetary survey (Slate Bank of Vietnam (SBV) and 89 credit institutions, for previous periods, based on original monetary survey (SBV and 28credit institutions).

London Club rescheduling was concluded in early 1998. Restructuring of the Russian debt was concluded in September 2000. on comparable terms to the 1993 Pans Club rescheduling.

Includes the lean component of foreign direct investment and other private sector borrowing, and short-term debt

STATISTICAL APPENDIX
Table 1.Vietnam: Gross Domestic Product by Expenditure Categories at Current Prices. 1994–2000 1/
1994199519961997199819992000
Official Estimate
(In billions of dong)
Consumption148,037187,170225,231250,584283,444301,690324,258
Private133,299163,429202.509225,084255,921272,619295,993
Government:14,73818,74122,72225,50027,52329,07128,265
Investment45,48362,13176,45088,754104,875110,503150,827
Gross capital formation43,32558,18771,59783,73497,551102,799121,857
Change in stocks2,1583,9444,8535,0207,3247,7048,970
Domestic demand193,520249,301301.681339,338388,319412,193455,085
Net exports-20,245-33,070-35,352-22,686-26,371-11,418-10,346
Exports61,08783,966110,835136,668161,910199,836241,401
Imports81,332117,036146,189159,354188,281211,254251,747
Statistical discrepancy2/5,25912,6615,707-3,029-932-833-600
GDP178,534228,892272,036313,623361,016399,942444,139
(In percent of GDP)
Consumption82.981.882.879.978.575.473.0
Private74.773.674.471.870.968.266.6
Government8.38.28.48.17.67.36.4
Investment25.527.128.128.329.027.629.5
Gross capital formation24.325.426.326.727.025.727.4
Change in stocks1.21.71.81.62.01.92.0
Domestic demand108.4108.9110.9108.2107.6103.1102.5
Net exports-11.3-14.4-13.0-7.2-7.3-2.9-2.3
Exports34.236.740.743.644.850.054.4
Imports45.651.153.750.852.252.856.7
Statistical discrepancy2/2.95.52.1-1.0-0.3-0.2-0.1
(Annual percentage change)
Consumption26.826.420.311.313.16.47.5
Private25.226.420.211.113.76.58.6
Government43.427.221.212.27.95.6-2.8
Investment33.736.623.016.118.25.418.4
Gross capital formation.41.434.323.017.016.55.418.5
Domestic demand28.428.821.012.514.46.110.4
Exports52.837.532.023.318.523.420.8
Imports57.443.924.99.018.212.219.2
GDP27.328.218.815.315.110.811.1
(Contribution to nominal GDP growth, in percent)
Domestic demand111.8110.8121.490.5103.461.397.0
Private consumption81.877.788.261.069.346.951.1
Fixed capital formation33.229.531.129.229.213.543.1
Change in stocks-3.23.52.10.44.91.02.9
Net exports-22.3-25.5-5.330.5-7.838.42.4
Statistical discrepancy2/10.614.7-16.1-21.04.40.30.5
GDP100.0100.0100.0100.0100.0100.0100.0
Source: General Statistical Office.

Data are latest official revisions of historical GDP estimates.

Difference between production -and expenditure-based estimates of GDP, the former of which are considered to be more accurate.

Source: General Statistical Office.

Data are latest official revisions of historical GDP estimates.

Difference between production -and expenditure-based estimates of GDP, the former of which are considered to be more accurate.

Table 2.Vietnam: Gross Domestic Product by Sector and Ownership at Current Prices, 1994-2000 1/
1994199519961997199819992000
Official estimate
(In billions of dong)
Gross Domestic Product178,534228,892272,036313,623361,016399,942444,139
State71,62391,977108,634126,970144,406154,927173,118
(excluding state management) 2/65,13983,69999,217116,510132,557143,244160,923
Nonstate106,911136,915163,402186,653216,610245,015271,021
Agriculture48,96862,21975,51480,82693,072101,723101,723
State2,1902,6643,4243,6283,9614,188
Nonstate46,77859,55572,09077,19889,11197,535
Industry and construction51,54065,82080,876100,594117,299137,959162,595
State26,24033,09739,22848,28255,50861,955
Nonstate25,30032,72341.64852.31261.79176,004
Services78,026100,853115,646132.203150,645160.260173,631
State43,19356,21665,98275,06084,93788,784
(excluding state management)2/36,70947,93856,56564,60073,08877,101
Nonstate34,83344,63749,66457,14365,70871,476
Wholesale and retail trade30,18537,49143,12548,91455,78359,38464,460
Hotels and restaurants6,1258,6259,77611,30712,40413,41214,343
Transport, storage and communication7,1549,11710,39012,41814,07615,54617,601
Financial intermediation3,4504,6045,1485,4446,2747,4888,457
Scientific activities and technology1,1051,4051,6291,7742,0261,9022,416
Real estate services9,13512,39213,50715,35517,68318,26019,173
Public admin, defense, and compulsory social security6,4848,2789,41710,46011,84911,68312,195
Education and training6,4968,2939,88711,27413,20214,00414,841
Health and social work2,7573,6424,0074,3814,9795,4015,999
Other services5,1357,0068,76010,87612,36913,18014,146
(In percent of GDP)
State sector40.140.239.940.540.038.739.0
(excluding state management) 2/36.536.636.537.136.735.836.2
Nonstate sector59.959.860.159.560.051.361.0
Agriculture27.427.227.825.825.825.422.9
State1.21.21.31.21.11.0
Nonstate26.226.026.524.624.724.4
Industry and construction28.928.829.732.132.534.536.6
State14.714.514.415.415.415.5
Nonstate14.214.315.316.717.119.0
Services43.744.142.542.241.740.139.1
State24.224.624.323.923.522.2
(excluding state management) 2/20.620.920.820.620.219.3
Nonstate19.519.518.318.218.217.9
Wholesale and retail trade16.916.415.915.615.514.814.5
Hotels and restaurants3.43.83.63.63.43.43.2
Transport, storage and communication4.04.03.84.03.93.94.0
Financial intermediation1.92.01.91.71.71.91.9
Scientific activities and technology0.60.60.60.60.60.50.5
Real estate services5.15.45.04.94.94.64.3
Public admin, defense, and compulsory social security3.63.63.53.33.32.92.7
Education and training3.63.63.63.63.73.53.3
Health and social work1.51.61.51.41.41.41.4
Other services2.93.13.23.53.43.33.2
Source: General Statistical Office.

Data are latest official revisions of historical GDP estimates.

State management includes public administration, defense, and compulsory social security.

Source: General Statistical Office.

Data are latest official revisions of historical GDP estimates.

State management includes public administration, defense, and compulsory social security.

Table 3.Vietnam: Gross Domestic Product by Sector at Constant Prices, 1994-2000
1994199519961997199819992000
Official estimateStaff estimateofficial estimateStaff estimateOfficial estimateStaff estimate
(In billions of dong at 1994 constant prices)
Agriculture, forestry, and fishery48,96851,31953,57755,89557,86657,54260,89360,55263,35362,998
Agriculture41,83943,65845,65247,91549,63952,37054,512
Forestry2,2652,3992,4482,4502,4592,5362,537
Fishery6,8645,2625,4775,5305.7685,9876,304
Industry51,54058,55067,01675,47381,76481,42088,04787,67696,91695,129
Mining and quarrying9,11410,34511,75313,30415,17317,20017,979
Manufacturing26.62430,23134,33938,74342,69446,10552,177
Electricity, gas, and water supply2,8563,3843,9864,5725,1365,5316,112
Construction12,94614,59016,93818,85518,76119,21120,648
Services78,02685,69893,24099,896104,966100,395107,329101,299113,314105,001
Wholesale and retail trade30,18533,59536,86639,42241,17041,99344,612
Hotels and restaurants6,1256,7417,4287,9498,3078,5178,913
Transport storage, and communication7,1547,8518,4299,1789,53610,14110,890
Financial intermediation3,4503,9404,3884,5784,8435,3275,864
Science and technology1,1051,1911,2731,3151,3921,2671,572
Real estate services9,1359,73810,33711,07111,68211,92612,236
State Management 1/6,4847,0637,5587,8608,1747,7227,867
Education and training6,4966,9687,5268,0628,6148,8099,162
Health and social work2,7573,0093,2203,3483,5661,7073,946
Other services5,1355,6026,2157,1137,6827,9198,252
Gross Domestic Product178,534195,567213,833231,264244,556239,357256,269249,527273,583263,128
(Real GDP, annual percentage change)
Agriculture, forestry, and fishery3.44.84.44.33.52.95.25.24.04.0
Agriculture3.54.34.65.03.65.54.1
Forestry2.25.92.00.10.43.10.0
Fishery2.98.24.11.04.33.85.3
Industry13.413.614.512.68.37.97.77.710.18.5
Mining and quarrying21.013.513.613.214.113.44.5
Manufacturing9.313.513.612.810.28.013.2
Electricity, gas, and water supply9.218.517.814.712.37.710.5
Construction18.212.716.111.3-0.52.47.5
Services9.69.88.87.15.10.52.30.95.63.7
Wholesale and reatail trade8.611.59.76.94.42.06.2
Hotels and restaurants7.110.110.27.04.52.54.6
Transport, storage, and communications6.69.77.48.93.96.37.4
financial intermedition22.314.211.44.35.810.010.1
Real Estate services8.96.66.27.15.52.12.6
State Management 1/11.08.97.04.04.0-5.51.9
Education and traing13.87.38.07.16.82.34.0
Health and social work6.39.17.04.06.54.06.4
Other services11.89.110.914.48.03.14.2
Gross Domestic Product8.89.59.38.25.83.54.84.26.85.5
(GDP deflator, annual percentage change)
Agriculture, forestry, and fishery13.121.216.32.611.23.9-3.9
Agriculture12.520.710.82.811.63.7-3.9
Forestry8.018.561.92.49.84.90.0
Fishery18.026.640.92.79.85.1-5.0
Industry12.112.47.410.47.69.2-9.2
Mining and quarrying4.46.422.214.37.324.7-4.3
Manufacturing14.513.55.911.08.75.2-11.6
Electricity, gas, and water supply34.638.918.114.77.04.7-9.5
Construction8.48.2-3.13.82.11.9-7.0
Services23.217.75.46.78.44.02.6
Wholesale and retail trade37.611.64.86.19.24.42.2
Hotels and restaurants11.727.92.98.15.05.52.2
Transport, storage and communications17.816.16.19.89.13.95.4
Financial intermedation21.716.90.41.48.98.52.6
Real estate services11.627.32.76.19.11.22.3
State management 1/19.217.26.36.88.94.42.5
Education and training17.419.010.46.49.63.71.9
Health and social work14.521.02.85.26.74.34.3
Other services12.425.112.78.55.33.43.0
Gross Domestic Product17.017.08.76.68.85.7-3.2
Sources: General Statistical Office; and staff estimates.

State management includes public administrtion, defense, and compulsory social security

Sources: General Statistical Office; and staff estimates.

State management includes public administrtion, defense, and compulsory social security

Table 4.Vietnam: Consumer Price Inflation, 1995-2001 1/2/(Annual average and 12-month percentage changes, unless otherwise indicated)
FoodNonfood consumer goods 3/
Overall indexGoodsAll foodStaplesOther foodServices
1995 December13.413.519.620.419.26.99.8
Average17.417.826.935.222.98.412.1
1996 December4.53.93.90.46.33.28.2
Average5.75.35.66.17.23.68.3
1997 December3.62.92.9-1.42.54.68.6
Average3.22.22.2-3.42.54.09.1
1998 December8.611.221.48.64.6
Average7.38.719.16.24.9
FoodNonfood
Overall indexAll foodStaplesOther foodAll nonfoodClothes footwearHousehold goodsHousing constructionTransport communicationsOther items
Weight (in percent)(1995-100100.060.920.0 4/80.0 4/39.16.64.62.97.217.8
1999 January122.59.112.325.79.04.04.14.71.40.75.6
February124.88.711.628.97.34.24.64.30.01.95.6
March123.98.911.425.67.85.05.14.40.24.56.1
April123.16.57.614.25.94.84.64.10.04.85.8
May122.64.64.90.06.14.23.83.60.04.25.1
June122.24.34.2-2.15.84.34.54.01.23.95.1
July121.74.44.3-1.55.84.44.54.02.33.55.3
August121.22.82.1-10.35.23.93.83.91.93.24.5
September120.51.20.0-14.53.63.03.33.12.61.83.4
October119.2-0.2-2.1-16.71.62.82.93.62.31.83.1
November119.70.2-1.2-13.21.82.41.82.91.51.52.9
December120.3-0.2-2.1-12.30.42.91.93.62.61.63.6
Average121.84.14.31.35.03.93.73.91.32.84.7
2000 January120.8-1.4-3.4-11.1-1.51.81.72.12.70.32.3
February122.7-1.7-3.6-12.7-1.31.31.01.53.8-0.91.9
March121.3-2.1-4.3-9.4-3.01.30.41.65.30.01.4
April120.4-2.2-4.2-10.0-2.81.0-0.10.54.90.31.1
May119.7-2.4-4.8-9.1-3.71.50.41.25.20.91.5
June119.1-2.5-5.2-9.4-4.11.60.21.84.81.41.6
July118.4-2.7-5.5-11.5-4.11.70.31.84.61.31.8
August118.5-2.2-4.8-11.1-3.31.80.01.94.51.52.2
September118.3-1.8-4.2-10.4-2.71.90.12.14.31.32.4
October118.4-0.7-2.5-7.7-1.22.20.22.25.12.12.4
November119.5-0.2-1.8-9.20.02.40.82.25.12.52.6
December119.6-0.6-2.3-8.3-0.72.00.52.34.61.92.1
Average119.7-1.7-3.9-10.1-2.41.70.51.84.61.11.9
2001 January119.9-0.7-2.7-11.6-0.42.20.92.34.42.32.3
February120.4-1.9-4.1-11.1-2.41.7-0.32.03.61.81.9
March119.5-1.5-3.7-12.0-1.62.00.22.22.41.02.9
April118.9-1.2-3.3-10.5-1.62.00.93.23.00.42.6
May118.7-0.8-2.6-10.4-0.71.91.12.82.3-0.12.8
June118.7-0.3-1.6-6.8-0.31.70.82.22.0-0.62.7
July118.90.5-0.3-0.3-0.31.60.92.11.9-0.22.5
August118.90.40.10.8-0.10.80.42.21.4-0.61.0
September119.51.01.13.60.41.01.22.11.3-0.41.2
October119.30.80.92.50.40.61.11.70.3-1.91.2
Sources: General Statistical Office; and staff estimates.

Begining in January 1998, the CPI index calculated using a new methodology that incorporates different weights on and sub-hems in the components.

Begining in July 2001, the weights on and sub-items in the components were changed. However, for the purpose of this table, the previous weights are maintained in computing the overall index.

Begining in 1998, all nonfood items.

Staff estimates.

Sources: General Statistical Office; and staff estimates.

Begining in January 1998, the CPI index calculated using a new methodology that incorporates different weights on and sub-hems in the components.

Begining in July 2001, the weights on and sub-items in the components were changed. However, for the purpose of this table, the previous weights are maintained in computing the overall index.

Begining in 1998, all nonfood items.

Staff estimates.

Table 5.Vietnam: Gross Value of Agricultural Production at Constant Prices, 1995-2000
199519961997199S19992000
Estimate
(In billions of dong, at constant 1994 prices)
Total79,81283,96789,95893,502100,283105,365
Food crops54,03456,81459,94262,25766,32268,937
Paddy and other cereals42,11044,65446,59349,06052,73854,938
Vegetables and beans4,9845,0885,4415,6825,9475,891
Fruits5,5785,6886,1326,0916,1936,638
Other1,3621,3841,7751,4241,4441,470
Industrial crops12,14912,80614,55115,04216,62417,923
Animal husbandry13,62914,34715,46516,20417,33718,505
(In percent total production)
Food crops67.767.766.666.656.165.4
Paddy and other cereals52.853.251.852.552.652.1
Vegetables and beans6.26.16.06.15.95.5
Fruits7.06.86.86.56.26.3
Other1.71.62.01.51.41.4
Industrial crops15.215.316.216.116.617.0
Animal husbandry17.117.117.217.317.317.6
(Annual percentage change)
Total6.65.27.13.97.35.1
Food crops5.05.15.53.96.53.9
Paddy and other cereals4.76.04.35.37.54.2
Vegetables and beans10.02.16.94.44.7-0.9
Fruits2.72.07.8-0.71.77.2
Other6.11.628.3-19.81.41.8
Industrial crops17.65.413.63.410.57.8
Animal husbandry4.55.37.84.87.06.7
Source: General Statistical Office.
Source: General Statistical Office.
Table 6.Vietnam: Production of Food Staples, 1995-2000
199519961997199819992000
Estimate
(In thousands of tons)
Total production27,57129,21830,61831,85434,254
By product
Rice paddy24,96426,39727,52429,14631,39432,554
Spring crop10,73712,21013,31013,56014,10415,562
Autunm crop6,5016,8796,6387,5238,7578,612
Winter crop7,7267,3097,5768,0638,5338,380
Other staples (rice equivalent units)2,6072,8213,0942,7082,860
other staples (gross output)5,3345,3015,7454,9115,3045,624
Maize1,1771,5371,6511,6121,7521,930
Sweet potato1,6861,6971,6911,5261,7451,658
Cassava2,2122,0672,4031,7731,8072,036
Potatoes260
By region
North10,57610,92712,01512,09313,170
South16,99518,29118,60319,76121,084
(Annual percentage change)
Total production5.26.04.84.07.5
Rice paddy6.15.74.35.97.73.7
Spring crop2.213.79.01.94.010.3
Autunm crop15.55.8-3.513.316.4-1.7
winter crop4.5-5.43.76.45.8-1.8
Other staples (rice equivalent units)-2.48.29.7-12.55.6
Maize2.930.57.4-2.48.710.2
Sweet potato-11.50.7-0.4-9.814.4-5.0
Cassava-6.2-6.516.2-26.21.912.7
Potatoes0.2
(In thousands of hectares)
Total area cultivated7,9738,2178,3308,5878,874
By product
Rice paddy6,7667,0047,1007,3637,6547,655
Spring crop2,4212,5412,6832,7832,8903,012
Autunam crop1,7421,9841,8852,1412,3412,293
Winter crop2,6022,4792,5322,4392,4232,350
Other staples1,2071,2131,2301,2241,220
Maize557615663650692714
Sweet potao305303267254270258
Cassava278276254236225235
Other6920468433
By region
North3,3333,3043,3653.3463,379
South4,6404,9134,9655,2415,495
Yield(In metric tons pet hectare)
By product
Rice paddy3.73.83.94.04.14.3
Spring crop4.44.85.04.94.95.2
Autumn crop3.73.53.53.53.73.8
Winter crop3.02.93.03.33.53.6
Maize2.12.52.52.52.52.7
Sweet potato5.55.66.36.06.56.4
Cassava8.07.59.57.58.08.7
By region
North3.23.33.63.63.9
South3.73.73.73.83.8
Per capita production
Total staples (in metric tons per capita)0.3830.3990.4120.4220.447
Rice0.3470.3610.3700.3860.4100.419
Other staples0.0360.0390.0420.0360.037
(in percent of total staples production)9.59.710.18.58.3
Total Staples (1994 = 100)103.5108.0111.4114.1120.9
Rice104.4108.6111.5116.3123.4126.1
Other staples96.0102.3110.495.299.0
Total staples (annual percentage change)3.54.33.22.55.9
Rice4.44.12.74.36.12.2
Other Staples-4.06.58.0-13.84.0
Sources: Ministry of Agriculture and Forestry and General statistical Office; and staff estimates.
Sources: Ministry of Agriculture and Forestry and General statistical Office; and staff estimates.
Table 7.Vietnam: Industrial Crop Production and Livestock, I995-2000
199519951997199819992000
Estimate
(In thousands of metric tons)
Production of annual crops
Cotton12.811.214.122.022.219.1
Jute14.815.022.314.69.411.0
Rush75.655.080.969.972.557.8
Sugarcane10,71111,37211,92113,84417,76015,246
Peanuts334.4357.7351.3386.0318.1352.9
Soybeans125.5113.8113.0146.7147.2141.9
Tobacco27.723.527.233.335.627.2
Production of perennial crops
Tea40.246.852.256.670.376.5
Coffee218.0320.1420.5409.3509.8698.2
Rubber124.7142.5186.5193.5248.7291.9
Coconut1165.31317.81317.61105.61104.2968.0
Pepper9.310.513.015.931.037.0
(Annual percentage change)
Cotton47.1-12.525.956.00.9-14.0
Jute15.61.44.1-34.5-35.617.0
Rush9.4-27.24.3-13.63.7-20.3
Sugarcane41.96.74.316.128.3-14.2
Peanuts13.67.0-0.29.9-17.610.9
Soybeans0.8-9.3-0.929.80.3-3.6
Tobacco27.6-15.212.522.46.9-23.6
Tea-4.316.410.68.424.28.8
Coffee21.146.831.6-2.724.637.0
Rubber-3.214.330.93.828.517.4
(In thousands of hectares)
Area cultivated of annual crops691.9666.1681.1754.5789.6726.7
Cotton17.515.015.223.821.218.9
Jute7.58.011.66.74.15.7
Rush10.49.111.19.810.98.6
Sugarcane224.8237.0257.0283.0344.2302.9
Peanuts259.9262.7253.5269.4247.6243.9
Soybeans121.1110.4106.4129.4129.1122.3
Tobacco27.723.926.332.432.524.4
Area cultivated of perennial crops704.4811.2936.4993.41051.21176.3
Tea66.774.778.677.484.889.5
Coffee186.4254.0340.4370.6408.0516.7
Rubber278.4303.0347.5382.0394.9406.9
Coconut172.9179.5169.9163.4163.5163.2
Pepper7.07.59.812.817.624.5
(In output per hectare, in metric tons)
Cotton0.70.70.90.91.01.0
Jute2.01.91.92.22.31.9
Rush7.36.07.37.16.76.7
Sugarcane47.648.046.448.951.650.3
Peanut1.31.41.41.41.31.4
Soybeans1.01.01.11.11.11.2
Tobacco1.01.01.01.01.11.1
Tea0.60.60.70.70.80.9
Coffee1.21.31.21.11.21.4
Rubber0.40.50.50.50.60.7
(In millions of heads)
Livestock
Buffalo3.03.02.93.03.02.8
Cattle3.63.83.94.04.14.1
Pigs (over two months old)16.316.917.618.118.920.2
Poultry142.1151.4160.6166.4179.3196.1
Sources: Ministry of Agriculture arm Forestry and General Statistical Office.
Sources: Ministry of Agriculture arm Forestry and General Statistical Office.
Table 8.Vietnam: Gross Value of Industrial Production at Constant Prices, 1995-2000 l/
199519961997199819992000
Estimate
(In trillions of dong, at constant 1994 prices)
Mining13.916.018.321.124.626.4
Coal1.71.92.22.12.02.2
Oil and gas10.812.514.216.920.621.9
Metal ores0.20.30.20.20.20.2
Stone and other mining1.21.31.71.91.82.1
Manufacturing83.294.9107.7120.7133.6157.3
Food and beverages27.030.934.036.537.739.4
Cigarettes and tobacco4.04.24.44.94.85.6
Textiles and garments9.19.811.613.113.615.4
Textile6.26.47.38.48.49.4
Garments2.93.44.34.75.26.0
Leather tanning and processing3.64.56.67.17.78.9
Wood and paper products5.25.55.76.26.77.8
Wood products3.33.23.13.03.23.7
Paper1.92.32.63.23.54.1
Printing, copying, publishing1.51.51.61.92.02.2
Chemical and petroleum products5.46.57.38.29.812.0
Coke and petroleum0.30.20.10.10.10.1
Chemicals5.16.37.28.19.711.9
Rubber and plastics2.32.83.54.45.46.8
Nonmetallic products9.210.112.213.714.817.4
Metal products5.77.07.68.310.011.9
Metallic products3.44.14.04.15.05.8
Products made of metal2.32.93.64.25.06.1
Machinery and equipment1.41.61.72.14.07.7
Computer and office equipment0.00.00.00.21.75.1
Other machinery and equipment1.41.61.71.92.32.6
Electric and electronic products3.44.75.16.27.38.7
Radio, TV, telecom, equipment2.13.13.33.54.04.6
Medical instruments0.20.30.20.40.40.4
Other electric and electronic products1.11.31.62.32.93.7
Vehicles and transport equipment3.43.43.45.16.39.2
Assembling and repairing of motor vehicles1.51.41.61.71.82.1
Transport equipment1.92.01.83.44.57.1
Furniture and other2.02.33.03.03.54.3
Furniture1.92.22.82.83.44.2
Other0.10.10.20.20.10.1
Electricity, gas, and water6.27.38.49.410.511.6
Electricity and gas5.46.57.68.59.510.6
Water supply0.80.80.80.91.01.0
Total103.4118.1134.4151.2168.7195.3
(Annual percentage change)
Mining13.515.114.415.316.67.3
Oil and gas13.215.713.619.021.96.3
Manufacturing13.514.013.512.110.717.7
Food and beverages12.914.410.07.43.34.5
Textiles and garments46.47.718.412.93.813.2
Metal products22.87.99.920.519.0
Electric and electronic products38.28.521.617.719.2
Vehicles and transport equipment0.0-1.452.123.546.0
Electricity, gas, and water18.518.715.111.911.710.5
Total14.514.213.812.511.615.7
Source: General Statistical Office

Due to reclassification of industrial activities, previously published industrial sector data are not comparable with the data in this table.

Source: General Statistical Office

Due to reclassification of industrial activities, previously published industrial sector data are not comparable with the data in this table.

Table 9.Vietnam: Industrial Production by Sector of Ownership at Constant Prices, 1995-2000 1/
199519961997199819992000
Estimate
(In billions of dong, at constant 1994 prices)
Total industrial production103,375118,097134,420151,224168,749195,321
State sector51,99158,16664,47469,46373,20882,101
Central33,92038,41142,21545,67748,39553,575
Local18,07119,75522,25923,78624,81328,526
Nonstate sector25,45128,36831,06833,40337,02743,809
Cooperatives6506847518591,076
Private2,2772,7923,2243,3833,718
Household18,19118,97719,70420,82721,933
Mixed4,3335,9157,3898,33410,250
Foreign invested sector25,93331,56238,87848,35858,51469,411
of which: oil and gas10,81112,46714,20716,83920,53221,876
(excluding oil and gas)15,12119,09524,67131,52037,98247,535
(In percent of total industrial production)
State sector50.349.348.045.943.442.0
Central32.832.531.430.228.727.4
Local17.516.716.615.714.714.6
Nonstate sector24.624.023.122.121.922.4
Cooperatives0.60.60.60.60.6
Private2.22.42.42.22.2
Household17.616.114.713.813.0
Mixed4.25.05.55.56.1
Foreign invested sector25.126.728.932.034.735.5
(excluding oil and gas)14.616.218.420.822.524.3
(Annual percentage change)
Total industrial production14.514.213.812.511.615.7
State sector13.611.910.87.75.412.1
Central14.013.29.98.26.010.7
Local12.69.312.76.94.315.0
Nonstate sector 2/18.511.59.57.510.818.3
Cooperatives5.29.814.425.3
Private22.615.54.99.9
Household4.33.85.75.6
Mixed36.524.912.823.0
Foreign invested sector21.723.224.421.018.6
(excluding oil and gas)26.329.227.820.525.2
Sources: General Statistical Office; and staff estimates.

Due to reclassification of industrial activities, previously published industrial sector data are not comparable with the data in this table.

Growth rate for 1995 covers both nonstate and foreign invested sectors.

Sources: General Statistical Office; and staff estimates.

Due to reclassification of industrial activities, previously published industrial sector data are not comparable with the data in this table.

Growth rate for 1995 covers both nonstate and foreign invested sectors.

Table 10.Vietnam: Population and Employment, 1995-2000 1/
199519961997199819992000
Estimate
(In thousands of persons, unless otherwise indicated)
Total population2/71,99673,15774,30775,45676,59777,686
(annual percentage change)1.71.61.61.51.51.4
Urban 3/14,93815,42016,83517,46518,08218,620
(annual percentage change)3.63.29.23.73.53.0
Rural 3/57,05757,73757,47257,99258,53559,066
(annual percentage change)1.21.2-0.50.90.90.9
Total employment34,59035,79236,99437,87735,73136,206
Unemployment rate4/5.85.96.06.96.76.4
(In percent of total population)
Urban 3/20.721.122.723.123.624.0
Rural 3/79.378.977.376.976.476.0
Female51.151.050.950.850.850.8
Male48.949.049.149.249.249.2
Age under 1530.530.1
Age 15-5960.560.9
Age 60 and over9.19.0
Total employment48.048.949.850.247.346.6
(In thousands of persons)
Total employment34,59035,79236,99437,87735,73136,206
Nonstate sector31,53732,65433,72734,49432,29832,791
State sector 5/3,0533,1383,2673,3833,4333,414
Government1,2581,278
Central261201
Local9971,077
State enterprises1,7951,860
Central1,0011,084
Local794776
(In percent of total employment)
Nonstate sector91.291.291.291.190.490.6
State sector8.83.88.38.99.69.4
Government3.63.6
Central0.80.6
Local2.93.0
State enterprises5.25.2
Central2.93.0
Local2.32.2
(Annual percentage change)
Total employment2.73.53.42.41.3
Nonstate sector2.63.53.32.31.5
State sector4.32.84.13.61.5-0.6
Government6.81.6
Central1.6-23.0
Local8.38.0
State enterprises3.63.6
Central1.48.3
Local4.0-2.3
Sources: General Statistical Office (GSO) and Ministry of Labour, Invalids, and Social Affairs (MOLISA); and staff estimates.

Beginning in 1999. employment data are as repotted in the Status of Labour - Employment in Vietnam (MOLISA). Previously, as reported in the various Statistical Yearbooks (GSO).

Annual official estimates adjusted on the basis of the 1959 and 1999 census.

Armed forces and some other special groups are excluced from urban/rural categories.

For labor force in urban area comprising males 15 to 60 years old and females 15-55 years old.

As reported by GSO

Sources: General Statistical Office (GSO) and Ministry of Labour, Invalids, and Social Affairs (MOLISA); and staff estimates.

Beginning in 1999. employment data are as repotted in the Status of Labour - Employment in Vietnam (MOLISA). Previously, as reported in the various Statistical Yearbooks (GSO).

Annual official estimates adjusted on the basis of the 1959 and 1999 census.

Armed forces and some other special groups are excluced from urban/rural categories.

For labor force in urban area comprising males 15 to 60 years old and females 15-55 years old.

As reported by GSO

Table 11.Vietnam: Total and Nonstate Employment by Sector, 1995-2000 1/
199519961997199819992000
Estimate
1. State and nonstate employment(In thousands of persons)
Total employment34,59035,79236,99437,87735,73126,206
Agriculture, fishneries, and forestry24,12224,77525,44326,07022,72622,670
Industry and construction4,5824,6294,6334,6364,4504,744
Inudustry 2/3,5872,6533,6563,656
Construction996975977930
Trade, Transport, and communications2,4512,7343,190
Trade1,8882,1592,672
Trade, transport and communications563575519
Education, health, Science, and Arts1,3851,4221,432
Other 2/2,0502,2322,296
(Annual percentage change)
Total employment2.73.53.42.41.3
Agriculture, fisheries, and Forestry0.02.72.72.5-0.2
Industry and construction5.31.00.10.16.6
Trade, transport and communications2.911.516.7
Education, health, science, and arts-0.72.70.7
Other 2/45.98.92.9
(In percent of total employment)
Agriculture, fisheries, and forestry69.769.268.868.853.662.6
Industry and construction13.212.912.512.212.513.1
Trade, transport, and Communications7.17.68.6
Education, health, science and arts4.04.03.9
Other 3/5.96.26.2
(In thousands of dong at 1994 prices)
Total Output per Worker5,6545,9746,2516,4586,6997,078
Agriculture, fisheries and forestry2,1282,1632,1972,2202,5322,686
Industry and construction12,77714,47916,29217,63718,29618,561
Trade, transport, and communications16,91316,57015,234
Other 2/12,38313,11913,759
(Annuel percentage change)
Total output per worker6.65.74.63.35.7
Agriculture, fisheries, and forestry4.81.61.61.06.1
Industry and constraction7.913.312.58.31.4
Trade, transport and Communications7.9-2.0-8.1
2. Nonstate employment4/(In thousands of percentage)
Total nonstate employment21,53732,65433,72734,49432,29837,791
Agriculture, fisheries, and forestry23,84024,52725,18625,827
Industry and construction3,5323,5473,4873,426
Industry 2/2,8332,8662,8492,814
Construction699681638612
Trade, transport, and communications2,0572,3172,788
Trade1,6891,9512,467
Transport and communications368366322
Education, health, science, and arts452450416
Other 3/1,6561,8141,850
(Annual percentage change)
Total Nonstate Employment2.63.53.32.31.5
Agriculture, fisheries, and forestry0.02.92.72.5
Industry and construction5.10.4-1.7-1.7
Trade, transport, and communications3.212.620.4
Education, health, science and art-10.2-0.6-7.4
Other 2/59.69.52.0
(In percent of total nonstate employment)
Agriculture, fisheries, and forestry75.675.174.768.2
Industry and construction11.210.910.39.0
Trade, transport and communications6.57.18.3
Education, health, science and arts1.41.41.2
Other 3/5.35.65.5
Source: General Statistical office, Central, instiute for Economic Management, and Ministry of labour, Invalids and Social Affairs (MOLISA) and staff estimates.

Beginning in 1995, employment data are as reported in the Status of Labour Employment in Vietnam (MOLSA).

Includes mining and quarrying and electricity. gas, and water supply.

Includes unclassified workers.

Employment outside central and local governmet and state-owned enterprises

Source: General Statistical office, Central, instiute for Economic Management, and Ministry of labour, Invalids and Social Affairs (MOLISA) and staff estimates.

Beginning in 1995, employment data are as reported in the Status of Labour Employment in Vietnam (MOLSA).

Includes mining and quarrying and electricity. gas, and water supply.

Includes unclassified workers.

Employment outside central and local governmet and state-owned enterprises

Table 12.Vietnam: Employment in the State Sector, 1995-2000
199519961997199819992000
Estimate
(In thousands of persons)
Total employment3,0533,1383,2673,3833,4333,414
Agriculture and forestry282248257243222224
Industry and construction1,0511,0821,1461,2101,2421,235
Industry754787807842865865
Construction297294338368377370
Trace, transport, and communications393417402400389387
Trade198208205201187176
Transport and communications195210197199202211
Education, health, science, and arts9339731,0161,0701,1001,110
Education711741777818849856
Science273232373335
Culture, arts, and sport323233353529
Public health163168173180183190
Other394418447460480458
(In percent of total state sector employment)
Agriculture and forestry9.27.97.97.26.56.6
Industry and construction34.434.535.135.836.236.2
Trade, transport, and communications12.913.312.311.811.311.3
Education, health, science, and arts30.531.031.131.632.032.5
Other12.913.313.713.614.013.4
(Annual percentage change)
Total employment4.32.84.13.61.5-0.6
Agriculture and forestry-2.3-12.13.6-5.4-8.60.9
Industry and constructionn6.02.95.95.62.6-0.6
Trade, transport, and communications1.06.0-3.6-0.5-2.8-0.5
Education, health, science, and arts4.74.34.45.42.80.9
Other7.26.26.83.04.4-4.6
(In thousands of dong per month)
Average nominal wage1/478543642697729736
Industry754708841898947937
Construction499573738807794770
Agriculture366422480514564555
Transportation8791,0181,1321,3041,2581,264
Trade490582688742768725
Education310329405451501512
Science361505555673585611
Culture, arts, and sports347400453540520526
Public health327363440480508520
State management357380435449458541
Financial imtermediation807940
Average real wage growth2/4.37.514.51.20.52.7
Industry11.6-11.115.0-0.41.30.7
Construction1.98.525.01.9-5.5-1.3
Agriculture8.98.910.2-0.15.40.1
Transportation35.29.67.67.4-7.32.2
Trade3.612.314.60.6-0.6-4.0
Education-10.20.519.43.86.74.0
Science-11.932.36.413.2-16.56.3
Culture, arts, and sports-4.89.09.711.1-7.52.9
Public health-7.05.017.41.81.64.1
State management-7.30.711.0-3.8-2.020.2
Financial intermediation0.9102
Consumer price inflation17.45.73.27.34.1-1.7
Sources: General Statistical Office (GSO); and staff estimates.

Cash income, including payments in kind, bonus payments, and social security contrbutions.

Nominai wage growth deflated by consumer price inflation.

Sources: General Statistical Office (GSO); and staff estimates.

Cash income, including payments in kind, bonus payments, and social security contrbutions.

Nominai wage growth deflated by consumer price inflation.

Table 13.Vietnam: Summary of General Government Budgetary Operations, 1995-2001 1/
2000
199519961997199819992000Budget 2/
(In trillions of dong)
Revenue and grants53.462.465.473.078.590.786.3
Revenue51.860.862.870.876.188.884.4
Tax revenue40.050.349.755.760.364.165.9
Nontax revenue11.810.613.115.215.824.718.5
Grants1.61.52.62.12.41.91.9
Total expenditure (including onlending)55.164.377.678.388.9109.7116.1
(excluding onlending)54.662.970.773.481.899.3105.7
Current expenditure42.547.351.352.955.165.770.4
Current non-interest expenditures39.644.649.450.952.862.666.1
Interest payments (paid)2.92.71.92.12.33.14.3
(scheduled)4.14.13.92.12.33.14.3
Capital expenditure and onlending12.617.126.425.933.844.043.3
of which: onlending0.51.46.95.47.110.410.4
Contingency0.00.00.00.00.00.02.4
Capital costs of structural reform 3/0.00.00.02.40.00.00.0
Overall fiscal balance (excluding onlending and capital costs of inform)-1.2-0.5-5.4-0.5-3.3-8.6-19.4
Overall fiscal balance (including onlending)-1.7-1.9-12.3-5.8-10.4-19.1-29.8
Angrented balance (including onlending and capital costs of reform)-1.7-1.9-12.3-8.2-10.4-19.1-29.8
Financing1.71.912.38.210.419.129.8
Domestic (net)2.70.65.20.8-1.54.414.3
Banking system 4/0.1-0.30.0-0.8-5.4-3.4
Nonbanks 5/2.60.85.21.63.97.8
Foreign (net)-1.01.47.17.411.914.615.5
Disbursements2.03.810.210.214.817.018.0
Amortization paid (·)3.02.53.22.83.02.42.5
(In percent of GDP)
Revenue and grants23.322.920.820.219.821.118.9
Revenue22.622.420.019.619.220.718.4
Tax revenue17.518.515.815.415.214.914.4
Nontax revenue5.13.94.24.24.05.74.0
Grants0.70.60.80.60.60.40.4
Total expenditure (including onlending)24.123.624.821.922.425.525.4
(excluding onlending)23.823.122.620.420.623.123.1
Current expenditure18.617.416.314.713.915.315.4
Current non-interest expenditure17.316.415.714.113.314.614.5
Interest payments (paid)1.31.00.60.60.60.70.9
Capital expenditure and onlending5.56.38.47.28.510.29.5
Contingency0.00.00.00.00.00.00.5
Overall fiscal balance (excluding onlending)-0.5-0.2-1.7-0.1-0.8-2.0-4.2
Overall fiscal balance (inucluding onlending)-0.8-0.7-3.9-1.6-2.6-4.4-6.5
Financing0.80.73.91.62.64.46.5
Domestic (net)1.20.21.70.2-0.41.03.1
Banking system 4/0.0-0.10.0-0.2-1.4-0.8
Nonbanks 5/1.10.31.70.51.01.8
Foreign (net)-0.40.52.32.13.03.43.4
(In trillions of dong unless otherwise indicated)
Memorandum items
Expenditures managed at units 6/4.83.64.85.37.4
(In percent of GDP)1.51.01.21.21.6
Wage and salary bill14.516.218.919.622.927.933.2
(in percent of GDP)6.36.06.05.45.86.57.3
Total social expenditure (in percent of GDP) 7/5.05.36.1
Sources: Ministry of Finance; and staff estimates and projections.

Cash basis.

Excluding current and capital casts of banking and state-owned enterprise reform.

Includes capital costs of bank restructuring estimated at D 24 trillion (0.7 percent of GDP) in 1998.

The difference between name finacing and per claims on government in the monetary survey for 1998 is due to bank recapitalization operations.

Domestic nonbank financing is derived as residual and includes statistical discrepancy.

Self-financed expenditure undertaker, by adminiistrative units of the central and local governments. which are excluded from the above budget presentation.

Staff estimate basal on (i) current social expenditure in the budget on education and training, health, and family planning; (ii) safety per costs of state-owned enterprise reform; (iii) targeted capital spending programs in poverty reduction and employment clean water and public health, family planning, education and training, and reforestation; and (iv) other capital expenditure on education and training and health, and on poverty-reioted projects in the agriculture, transportation, and electricity and water sectors Excludes social security.

Sources: Ministry of Finance; and staff estimates and projections.

Cash basis.

Excluding current and capital casts of banking and state-owned enterprise reform.

Includes capital costs of bank restructuring estimated at D 24 trillion (0.7 percent of GDP) in 1998.

The difference between name finacing and per claims on government in the monetary survey for 1998 is due to bank recapitalization operations.

Domestic nonbank financing is derived as residual and includes statistical discrepancy.

Self-financed expenditure undertaker, by adminiistrative units of the central and local governments. which are excluded from the above budget presentation.

Staff estimate basal on (i) current social expenditure in the budget on education and training, health, and family planning; (ii) safety per costs of state-owned enterprise reform; (iii) targeted capital spending programs in poverty reduction and employment clean water and public health, family planning, education and training, and reforestation; and (iv) other capital expenditure on education and training and health, and on poverty-reioted projects in the agriculture, transportation, and electricity and water sectors Excludes social security.

Table 14.Vietnam: Government Revenues, 1995-2001
1995199619971998199920002001
Budget
(In trillions of dong)
Total revenue and grants53.462.465.473.078.590.786.3
Tax revenue40.050.349.755.760.364.165.9
Corporate income tax 1/7.410.111.613.114.519.820.8
Individual income tax0.51.41.51.81.91.81.8
Capital user charge1.31.51.51.71.51.41.5
Land and housing tax0.30.40.30.30.30.40.3
License Tax0.20.30.40.30.40.40.4
Tax on the transfer of properties1.11.01.01.00.90.9
Tax on and use right0.30.30.40.30.20.2
Value added tax (VAT) 2/7.811.111.811.817.217.117.6
Excises2.54.54.65.64.55.35.7
Slaughter tax 3/0.10.10.10.00.00.00.0
Agricultural tax1.61.91.72.02.01.81.5
Import and export taxes13.315.113.514.914.413.515.0
Othe taxes on trade0.01.20.01.51.00.10.2
Other taxes4.91.31.41.41.21.40.1
Nontax revenue11.810.613.115.215.824.718.5
Fees and charges3.33.94.13.65.14.6
Rental of land0.00.50.50.60.50.4
Income from natural resources2.43.13.43.34.66.76.1
Net profit after tax2.12.42.12.98.75.2
Capital revenues0.30.80.80.80.80.4
Other1.82.14.33.42.81.7
Grants1.61.52.62.12.41.91.9
(In percent of GDP)
Total revenue and grants23.322.920.820.219.821.118.9
Tax revenue17.518.515.815.415.214.914.4
Corporate income tax 1/3.33.73.73.63.74.64.5
Individual income tax0.20.50.50.50.50.40.4
Capital user charge0.60.60.50.50.40.30.3
Land and housing tax0.10.10.10.10.10.10.1
License tax0.10.10.10.10.10.10.1
Tax or. the transfer of properties0.30.30.30.20.2
Tax on land use right0.10.10.10.00.0
VAT 2/3.44.13.83.34.34.03.8
Excises1.11.71.51.51.11.21.2
Slaughter tax0.00.00.00.00.00.00.0
Agricultural tax0.70.70.50.50.50.40.3
Import and export taxes5.85.64.34.13.63.13.3
Othe taxes or trade0.00.40.00.40.20.00.0
Other taxes2.10.50.40.40.30.30.0
Nontax revenue5.13.94.24.24.05.74.0
Fees and charges1.21.10.91.21.0
Rental of land0.10.20.10.10.1
Income from natural resources1.01.11.10.91.11.61.3
Net profit after tax0.80.60.72.01.1
Capital revenues0.30.20.20.20.1
Other0.71.20.90.70.4
Grants0.70.60.80.60.60.40.4
Sources: Ministry of Finance, Budget Department; and staff estimates.

Profit tax prior to 1999.

Turnover tax prior to 1999.

Abolished in 1998.

Sources: Ministry of Finance, Budget Department; and staff estimates.

Profit tax prior to 1999.

Turnover tax prior to 1999.

Abolished in 1998.

Table 15.Vietnam: Government Expenditures, 1995-2001
1995199619971998199920002001
Budget l/
(In trillions of dong)
Total expenditure (cash basis)55.164.377.678.888.9109.7116.1
Total current expenditure (cash basis)42.547.351.352.955.165.770.4
General administrative services5.76.47.16.76.86.36.1
Economic services4.04.24.54.84.85.45.8
Social services18.220.323.724.425.632.231.7
Education4.75.57.27.78.010.710.9
health2.42.83.03.13.13.73.7
Social subsidies7.48.29.28.79.011.310.5
Other3.83.94.35.05.56.56.5
Other noninterest expenditure 2/11.713.714.114.815.718.722.6
Interest payments (paid)2.92.71.92.12.33.14.3
Foreign1.41.20.90.9
Paid1.41.20.90.9
Arrears1.21.42.00.0
Domestic1.51.51.01.2
Capital expenditure and onlending12.617.126.425.933.844.043.3
Capital expenditure12.115.619.520.526.733.632.9
Onlending0.51.46.95.47.110.410.4
Contingency0.00.00.00.00.00.02.4
(In percent of GDP)
Total expenditure (cash basis)24.123.624.821.922.425.525.4
Total current expenditure (cash basis)18.617.416.314.713.915.315.4
General administrative services2.52.32.31.91.71.51.3
Economic services1.71.51.41.31.21.31.3
Social services8.07.57.56.86.47.56.9
Education2.12.02.32.12.02.52.4
Health1.01.01.00.80.80.90.8
Social subsides3.23.02.92.42.32.62.3
Other1.61.41.41.41.41.51.4
Other noninterest expenditure 2/5.15.04.54.13.94.34.9
Interest payments (paid)1.31.00.60.60.60.70.9
Foreign0.60.40.30.2
Domestic0.70.60.30.3
Capital expenditure and onlending5.56.38.47.28.510.29.5
Capital expenditure5.35.76.25.76.77.87.2
Onlending0.20.52.21.51.82.42.3
Contingency0.00.00.00.00.00.00.5
Sources Ministry of Finance, Budget Department: and staff estimates.

Excludes current and capital costs of slate-owned enterprise and banking sector reforms.

Includes defense expenditures.

Sources Ministry of Finance, Budget Department: and staff estimates.

Excludes current and capital costs of slate-owned enterprise and banking sector reforms.

Includes defense expenditures.

Table 16.Vietnam: Treasury Bill and Bond Issues, 1996-2001 1/(In billions of dong, unless otherwise indicated)
Auction dateTreasury Bills (one-year)Treasury Bonds (two-year)2/Treasury Bonds (five-year)2/
Amount soldAverage yieldEnd-month outstanding stockAmount soldAverage yieldEnd-month outstanding stockAmount soldEnd-month outstanding stock
1996 December08249212.01,260
1997 December39.02,91813212.04,836
1998 December36911.63,72127213.06,418
1999 January6611.53,78706,418
February6911.53,83.158713.06,683
March25511.04,0531,36613.07,495
April27810.24,14787413.07,909
May2019.93,97034113.08,0371,5071,507
June3809.63,98007,8581,9583,465
July3249.43,77507,4701,0314,496
August2979.03,38407,00204,496
September4107.93,39806,65704,496
October4006.53,24806,34104,496
November3334.93,38106,14104,496
December03,01206,00904,496
2000 January3256.03,27106,00904,496
February3506.03,55206,00904,496
March9775.74,27405,82404,496
April6155.74,61105,65304,496
May2005.44,61105,42104,496
June865.14,31705,28004,496
July6655.04,65805,13204,496
August5255.14,88605,02304,496
September1905.14,66604,40804,496
October5405.24,80603,84904,496
November875.34,56003,43904,496
December215.44,58103,16704,496
2001 January855.44,34103,16704,496
February2305.44,22102,58004,496
March5055.53,74901,21404,496
April2105.53,344
May4455.53,589
June3055.53,808
July405.53,183
August1805.72,838
September3105.82,958
Memorandum items:19971998199920002001 3/
Total stock of debt (in trillions of dong, end of period)7,75410,13913,51712,2449,459
(In percent of GDP)2.52.83.42.82.1
Sources: State Bank of Vietnam and Ministry of Finance; and staff estimates.

In addition to these amounts, D 246 billion in shorter-term maturity bills were auctioned during 1995-96. Treasury bills of varying maturities have also been placed directly with the public through the Ministry of Finance’s retail network.

Beginning in April 2001, data not reported.

As of end-March 2001.

Sources: State Bank of Vietnam and Ministry of Finance; and staff estimates.

In addition to these amounts, D 246 billion in shorter-term maturity bills were auctioned during 1995-96. Treasury bills of varying maturities have also been placed directly with the public through the Ministry of Finance’s retail network.

Beginning in April 2001, data not reported.

As of end-March 2001.

Table 17.Vietnam: Monetary Survey, 1996-20011 1/
199619971998199920002001
MarchJuneSeptDec.MarchJuneAug.
(In trillions of dong, end of period)
Net foreign assets14.321.031.261.273.876.786.495.7101.3108.7113.0
Foreign assets31.237.947.077.790.592.3101.9112.7118.5126.5131.1
Foreign liabilities-17.0-16.9-15.8-16.5-16.8-15.5-15.6-17.0-17.2-17.8-18.1
Net domestic assets50.460.671.299.2103.8111.4111.6127.2157.1140.2147.8
Domestic credit (net)55.366.881.0115.7119.7130.1135.9155.2163.6167.6174.9
Net claims on government 2/4.44.48.43.0-1.6-2.9-4.7-0.5-0.7-4.5-3.7
Credit to the economy50.962.472.7112.7121.4133.0140.6155.7164.3172.1178.5
Claims on state enterprises26.831.038.154.357.964.064.869.973.175.1
Claims on other sectors24.131.434.658.463.569.075.885.891.297.0
Other items, net-4.9-6.2-9.8-16.5-16.0-18.7-24.3-28.0-26.5-27.4-27.0
Broad money64.781.6102.4160.4177.5188.3198.1222.9238.5249.0260.8
of which: total deposits42.056.575.5119.1134.9144.6153.0170.7183.6192.0201.0
Dong liquidity51.562.978.3116.5127.3134.8139.2152.5160.6164.7171.1
Currency outside banks22.625.127.041.342.643.745.052.254.957.059.8
Deposits28.937.851.475.384.891.194.1100.3105.8107.7111.3
Demand deposits18.723.131.147.154.458.659.058.467.267.670.1
Other deposits10.214.720.228.230.432.535.141.938.640.141.2
Foreign currency deposits13.218.724.143.850.253.558.970.477.884.389.7
(In millions of U.S. dollars)1,1801,5211,7333,1263,5683.7964,1424,8545,3515,6775,981
(In percent of total liquidity)20.322.923.527.328.328.429.731.632.633.834.4
(Annual percentage change)
Credit to the economy20.122.616.438.135.429.429.5
Claims on enterprises11.315.622.928.726.317.4
Claims on other sectors31.730.510.046.943.540.5
Broad money (M2)32.726.125.539.034.332.332.4
of which: total deposits25.334.333.643.336.132.831.9
Dong liquidity23.722.024.630.826.222.223.6
Currency outside banks18.110.97.426.628.830.633.8
Deposits28.530.836.033.224.818.213.8
Foreign currency deposits19.042.028.860.555.157.653.0
(Change in percent of beginning of year broad money)
Net foreign assets6.510.412.57.89.715.721.52.55.97.7
Net domestic assets16.315.713.1-2.97.67.717.54.55.99.3
Net claims on government-0.50.04.9-2.9-3.7-4.8-2.1-0.1-1.8-1.4
Credit to the economy16.217.812.65.412.617.426.83.87.410.2
Velocity 3/4.23.83.52.52.42.32.21.91.91.81.6
Money multiplier 4/2.02.32.62.83.03.23.43.13.23.43.3
Currency to dong deposits (in percent)78.466.552.554.850.347.947.852.151.952.953.7
Currency to total deposits (in percent)53.944.535.734.631.630.229.430.629.929.729.8
Sources: State Bank of Vietnam; and staff estimates.

Data for 1996-1995 comprise four state-ownedcommercial banks and 24 nonstate-owned banks. Data from 1999 onwards comprise six state-owned commercial banks and S3 non-state credit institutions.

Includes D 2.4 million recapitalization of state-owned commercial banks (SOCBs) in October 1998, under which frozen loans of SOCBs were written off on behalf of the government and swapped for government equity in SOCBs.

Velocity is measured as the ratio of GDP to end-of-period broad money (M2).

Money multiplier is measured as the ratio of broad money (M2) to reserve money.

Sources: State Bank of Vietnam; and staff estimates.

Data for 1996-1995 comprise four state-ownedcommercial banks and 24 nonstate-owned banks. Data from 1999 onwards comprise six state-owned commercial banks and S3 non-state credit institutions.

Includes D 2.4 million recapitalization of state-owned commercial banks (SOCBs) in October 1998, under which frozen loans of SOCBs were written off on behalf of the government and swapped for government equity in SOCBs.

Velocity is measured as the ratio of GDP to end-of-period broad money (M2).

Money multiplier is measured as the ratio of broad money (M2) to reserve money.

Table 18.Vietnam: Balance Sheet of the State Bank of Vietnam, 1996-2001
199619971998199920002001
MarchJuneSept.Dec.MarchJuneAug.
(In trillions of dong, end of period)
Net foreign assets14.019.422.140.844.744.044.743.942.944.750.9
Foreign assets20.025.629.148.051.851.151.750.949.852.258.7
Foreign liabilities-6.0-6.2-7.0-7.2-7.1-7.1-6.9-7.1-6.9-7.5-7.8
Net domestic assets18.216.416.617.413.614.213.428.931.127.927.6
Net domestic credit13.011.012.810.55.35.14.418.620.318.418.9
Net claims on government5.24.06.30.2-5.9-6.5-8.44.34.92.72.7
Claims on banks7.76.86.510.311.111.512.814.215.415.716.1
Claims on enterprises and nonbank financial institutions0.10.20.00.00.00.00.00.00.00.00.0
Other items, net5.25.43.76.98.39.19.010.310.89.48.7
Reserve money32.235.838.758.258.358.258.272.874.072.578.4
Currency in circulation23.826.328.344.944.846.047.354.357.459.762.1
Bank deposits7.89.310.413.313.512.310.818.416.612.816.3
Vault cash1.21.21.33.72.22.32.32.12.52.72.3
Required reserves 1/4.04.76.34.95.55.96.29.810.612.713.4
Excess reserves 1/4.23.62.38.37.85.13.98.45.1-0.22.7
Other deposits0.60.20.00.00.00.00.00.00.00.00.0
(Annual percentage change)
Net foreign assets27.638.114.184.485.459.132.17.5-4.11.415.4
Net domestic assets14.8-9.81.05.2-9.830.042.665.9128.896.2104.9
Net domestic credit31.8-15.617.1-18.1-55.3-31.5-27.576.5285.5262.7320.4
Net claims on government72.1-22.356.6-96.8-216.5-2,120.5683.92,061.0-183.1-141.9-133.4
Claims on banks13.5-11.9-3.858.265.962.878.338.038.236.028.1
Reserve money20.011.18.150.548.850.934.425.026.924.536.3
Currency in circulation18.910.37.659.059.167.565.020.928.030.032.0
Bank deposits23.819.211.627.522.510.0-25.938.823.14.155.7
(Change in percent of beginning of year reserve money)
Net foreign assets11.316.67.648.352.642.425.15.3-3.11.111.8
Net domestic assets8.7-5.50.52.2-3.88.59.319.730.023.524.5
Net domestic credit11.7-6.35.2-6.0-16.6-6.1-3.913.825.722.925.0
Of which: Net claims on governmemt8.1-3.66.4-15.8-27.9-17.6-16.97.118.415.818.8
Memorandum item:
Gross official reserves (in millions of U.S. dollars) 2/1,6731,8571,7652,7112,7902,8572,9473,0302,8963,0863,495
(in weeks of next year’s imports) 3/6.47.26.88.17.98.18.38.67.07.48.4
Sources: State Bank of Vietnam; and staff estimates.

Staff estimate.

Excludes foreign currency counterpart of government foreign currency deposits at the State Bank of Vietnam.

Imports of goods and nonfactor services.

Sources: State Bank of Vietnam; and staff estimates.

Staff estimate.

Excludes foreign currency counterpart of government foreign currency deposits at the State Bank of Vietnam.

Imports of goods and nonfactor services.

Table 19.Vietnam: Consolidated Balance Sheet of Deposit Money Banks, 1996-2001 1/
199619971998199920002001
MarchJuneSept.Dec.MarchJuneAug.
(In trillions of dong, end of period)
Net foreign assets0.21.69.120.429.032.741.651.858.464.162.1
Foreign assets11.212.317.829.738.741.250.361.768.874.372.4
Foreign liabilities-11.0-10.7-8.7-9.3-9.7-8.5-8.7-9.9-10.4-10.3-10.4
Net domestic assets41.254.766.498.7105.9111.9111.4118.8125.2127.9138.9
Net domestic credit from the commercial banks50.062.674.7115.5125.6136.5144.3150.9158.7164.9172.1
Net credit to government-0.80.42.12.84.23.53.7-4.8-5.6-7.2-6.4
Credit to the economy50.862.372.7112.7121.4133.0140.6155.7164.3172.1178.5
State enterprises26.831.038.154.357.964.064.869.973.175.1
Other sectors24.031.334.658.463.569.075.885.891.297.0
Of which: claims on nonbank financial institutions0.00.10.10.00.00.00.00.00.00.00.0
Banks’ reserves9.39.59.916.915.513.312.520.418.315.218.4
Credit from State Bank of Vietnam-6.1-5.6-4.2-11.6-12.0-12.5-13.2-14.4-15.7-15.9-16.0
Capital and reserves-6.2-8.2-11.6-19.8-20.1-20.4-21.6-22.4-23.0-23.4-24.1
other items, net-5.7-3.7-2.4-2.2-3.2-5.1-10.7-15.5-13.0-12.9-11.5
Deposits41.556.375.4119.1134.9144.6153.0170.7183.6192.0201.1
Dong deposits28.337.651.475.384.891.194.1100.3105.8107.7111.3
Demand deposits10.214.720.228.230.432.535.141.938.640.141.2
Time deposits18.122.931.147.154.458.659.058.467.267.670.1
Foreign curency deposits13.218.724.143.850.253.558.970.477.884.389.7
(Annual percentage change)
Credit to the economy20.022.616.738.135.429.429.8
State enterprises11.315.622.928.726.317.4
Other sectors31.530.410.646.943.640.5
Credit from Stale Bank of Vietnam5.9-9.5-23.624.630.927.4
Total deposits25.435.734.143.336.132.831.9
Dong deposits28.732.836.733.224.818.218.8
Demand deposits48.643.837.948.327.123.20.0
Time deposits19.626.636.024.123.615.40.0
Foreign currency deposits19.042.028.860.555.157.653.0
Memorandum items:
Foreign currency deposits (in millions of U.S. dollars)1,1801,5211,7333,1263,5683,7964,1424,8545,3515,6775,981
(annual percentage change) 2/17.528.816.055.250.049.553.0
(In percent of total deposits)31.733.231.936.837.237.038.541.242.443.944.6
(change in millions of U.S. dollars) 3/1763402131,7274978241,127
Sources: State Bank of Vietnam; and staff estimates.

Data for 1996-1998 compraise four state-owned ccmmercial hanks and 24 nonstate-owned banks. Data from 1999 onwards comprise six state-owned commercial banks and 83 non-state credit instituions.

Twelve-month percentage changes.

Change since the beginning of the year.

Sources: State Bank of Vietnam; and staff estimates.

Data for 1996-1998 compraise four state-owned ccmmercial hanks and 24 nonstate-owned banks. Data from 1999 onwards comprise six state-owned commercial banks and 83 non-state credit instituions.

Twelve-month percentage changes.

Change since the beginning of the year.

Table 20.Vietnam: Distribution of Credit, 1996-2080 1/2/
19961997199819992000
(In billions of dong end of period)
Total credit to the economy3/50,75162,20172,597112,730155,720
To state enterprises26,81031,22238,07654,33569,918
To other sectors23,94130,97934,52153,09585,802
Credit extended by state-owned commercial banks38,32048,04259,08776,559114,193
To state enterprises22,03026,62534,218
To other sectors16,29021,41724,869
Credit extended by other banks 4/12,43114,15913,51036,17141,527
To state enterprisest4,7804,5973,858
To other sectors7,6519,5629,652
Total dong loans3/32,18742,80153,64183,848123,418
To state enterprises12,73517,87524,410
To other sectors19,45224,92629,231
Credit extended by state-owned commercial banks27,05636,87641,36363,51097,773
To state enterprises11,53716,59322,884
To other sectors15,51920,28318,479
Credit extended by other banks 4/5,1315,9259,13620,33825,645
To state enterprises1,1981,2821,526
To other sectors3,9334,6437,610
Total foreign currency loans3/18,56419,40018,95628,88232,302
To state enterprises14,07513,34713,666
To other sectors4,4896,0535,290
Credit extended by state-owned commercial banks11,26411,16617,72413,04916,420
To state enterprises10,49310,03211,334
To other sectors7711,1346,390
Credit extended by other banks 4/7,3008,2344,37415,83415,882
To state enterprises3,5823,3152,332
To other sectors3,7184,9192,042
(In percent of total credit to the economy)
Total credit to the economy 3/100.0100.0100.0100.0100.0
To state enterprises52.850.252.448.244.9
To other sectors47.349.847.651.855.1
Credit extended by state-owned commercial banks75.577.281.467.973.3
To state enterprises43.442.847.1
To other sectors32.134.434.3
Credit extended by other banks 4/24.522.318.632.126.7
To state enterprises9.47.45.3
To other sectors15.115.413.3
Total dong loans63.468.873.974.479.3
Credit extended by state-owned commercial banks53.359.357.056.362.8
Credit extended by other banks 4/10.19.512.618.016.5
Total foreign currency loans36.631.226.125.620.7
Credit extended by state-owned commercial banks12.218.024.411.610.5
Credit extended by other banks 4/14.413.26.014.010.2
(In billions of dong end of period)
Total credit to the economy by secto
Agriculture, fisheries, and forestry29,53341,577
Industry and construction46,89557,697
Industry30,77537,372
Construction16,12020,325
Trade, transportation, and communications28,85838,166
Trade24,46230,597
Transport, storage, and communications4,3967,569
Other services7,44018,280
(In percent of total credit to the economy)
Agriculture, fisheries, and forestry26.226.7
Industry and constraction41.637.1
Trade, transportation, and communications25.624.5
Other services6.611.7
Sources: State Bank of Vietnam; and staff estimates.

Begining in 1999, credit to the economy by sector of ownership are estimated rather than actual data.

Data for 1956-1998 comprise for state-owned commercial banks and 24 nonstate-owned banks. Data from 1995 onwards comprise six state-owned commercial banks and 83 non-state credit institutions.

Excludes net credit to the government.

Includes joint-stock banks, joint-venture banks, branches of foreign banks, and the Central People’s Credit Fund.

Sources: State Bank of Vietnam; and staff estimates.

Begining in 1999, credit to the economy by sector of ownership are estimated rather than actual data.

Data for 1956-1998 comprise for state-owned commercial banks and 24 nonstate-owned banks. Data from 1995 onwards comprise six state-owned commercial banks and 83 non-state credit institutions.

Excludes net credit to the government.

Includes joint-stock banks, joint-venture banks, branches of foreign banks, and the Central People’s Credit Fund.

Table 21.Vietnam: Overdue Loans of Deposit Money Banks, 1996-2001 1/2/
199619971998199920002001
MarchJuneAug.
(In billions of dong, end of period)
Deposit money banks4,7267,6828,69710,49015,11115,57816,51416,858
Four largest state-owned commercial banks4,2095,7696,4717,81310,90211,40312,34412,745
Other banks5171,9142,2272,6774,2094,1754,1704,113
(In percent of total loans)
Deposit money banks9.312.412.012.19.79.59.69.4
Four largest state-owned commercial banks11.012.011.010.810.09.69.99.9
Other banks4.213.516.418.99.09.18.78.3
(In percent of total bank assets)
Deposit money backs5.57.46.86.65.45.25.35.3
Four largest state-owned commercial banks6.47.16.25.85.45.35.55.5
Other banks2.68.59.811.05.15.14.74.6
(In percent of total overdues)
State-owned enterprises44.234.834.7
Cooperatives1.71.31.0
Joint-stock companies11.845.746.7
Joint ventures0.60.61.1
Private sector41.717.516.6
(In percent of total loans to the sector)
State-owned enterprises7.88.67.9
Cooperatives29.740.235.1
Joint-stock companies7.434.336.7
Joint ventures1.01.22.0
Private sector14.98.17.7
Sources: State Bank of Vietnam; and staff estimates.

Based on nonstandard classification of nonperforming loans, which tends to underestimate the actual amount of bad loans. Until 1999, includes the four largest state-owned commercial banks and 24 nonstate-owned banks. Beginning in 2000. based on the four largest state-owned commercial banks and 85 other credit institutions.

Beginning June 1999, data on credit to the economy (including overdues) by sector of ownership no longer compiled by the State Bank of Vietnam in consolidated balance sheet of deposit money banks.

Sources: State Bank of Vietnam; and staff estimates.

Based on nonstandard classification of nonperforming loans, which tends to underestimate the actual amount of bad loans. Until 1999, includes the four largest state-owned commercial banks and 24 nonstate-owned banks. Beginning in 2000. based on the four largest state-owned commercial banks and 85 other credit institutions.

Beginning June 1999, data on credit to the economy (including overdues) by sector of ownership no longer compiled by the State Bank of Vietnam in consolidated balance sheet of deposit money banks.

Table 22.Vietnam: Nominal and Real Interest Rates, 1996-2001(ln percent per year, end of period)
199619971998199920002001
Mar.Jun.Sep.Dec.Mar.Jul.Sep.Dec.Mar.JunSep.Dec.Mar.Apr.MayJuneJulyAug.Sept
Nominal Interest rates
Deposit rates1/
Demand deposits, enterprises6.24.65.45.55.55.55.15.23.01.71.71.82.02.32.31.81.81.81.81.82.1
Savings deposits (three-month), households9.18.19.49.99.79.79.49.15.14.03.73.64.14.35.15.14.84.94.95.55.5
Foreign currency demand deposits2.72.72.42.42.62.32.32.31.51.81.91.91.91.81.81.81.71.71.2
Foreign currency deposits (six-month)5.15.15.14.94.94.74.84.53.84.24.84.84.03.83.73.23.13.02.7
Lending rates1/
Working capital (short term)15.912.715.215.014.714.713.913.712.711.710.810.19.89.89.89.19.39.29.39.39.3
Fixed capital (medium term)17.314.015.715.915.415.214.714.012.711.711.410.410.410.411.711.210.910.310.310.310.3
Foreign currency loans9.58.58.58.57.57.57.17.07.26.57.07.07.07.06.35.45.45.55.55.55.5
Real Interest rates2/
Deposit rates
Demand deposits, enterprises2.30.71.1-2.0-2.6-3.0-3.50.10.31.73.54.34.32.83.83.43.02.62.11.61.5
Savings deposits (three-month), households5.14.15.02.01.20.90.53.82.24.05.56.16.54.86.56.76.05.85.25.44.9
Foreign currency demand deposits17.46.312.24.1-6.1-2.10.93.94.54.95.511.46.95.04.05.37.710.59.6
Foreign currency deposits (six-month)20.08.815.16.6-4.00.23.46.26.87.48.614.79.17.16.06.89.111.911.1
Lending rates
Working capital (short term)11.78.510.66.85.85.44.68.29.611.712.712.812.310.311.310.810.610.19.69.28.7
Working capatial (short term; adjusted for core inflation)10.47.310.19.79.19.09.08.98.58.79.08.57.87.47.77.17.27.27.57.98.1
Fixed capital (medium term)13.09.811.17.66.55.95.38.49.611.713.413.113.010.913.212.912.211.210.510.19.6
Foreign currency loans8.019.824.012.417.89.3-2.02.45.88.210.210.210.917.111.58.87.89.111.714.514.1
Memorandum items
Interest rate spread 3/6.84.65.85.25.05.04.54.67.67.77.16.55.65.54.74.04.54.34.43.83.8
Inflation 4/3.83.84.27.78.48.88.95.12.8-0.1-1.7-2.4-2.3-0.5-1.4-1.5-1.2-0.8-0.20.20.6
Core inflation 4/5.05.04.74.85.25.24.54.43.82.81.61.51.92.22.01.91.91.81.71.31.1
Exchange rate (+ depreciation) 5/2.414.619.011.518.810.6-0.30.61.41.51.20.61.38.93.51.61.02.75.78.88.9
Sources Stale Bank of Vietnam; and staff estimates.

Average of four largest state-owned commercial banks.

Measured with respect to nominal interest rates at the end of each quarter and average monthly inflation during that quarter using the exact Fisher formula Real interest rates on foreign currency deposits and loans are adjusted for exchange rate depreciation using the same formula.

Difference between interest rates on working capital loans and households’ three-month savings deposits.

Average monthly inflation during preceding quarter, and seasonally adjusted.

Average depreciation during preceding quarter, annualized.

Sources Stale Bank of Vietnam; and staff estimates.

Average of four largest state-owned commercial banks.

Measured with respect to nominal interest rates at the end of each quarter and average monthly inflation during that quarter using the exact Fisher formula Real interest rates on foreign currency deposits and loans are adjusted for exchange rate depreciation using the same formula.

Difference between interest rates on working capital loans and households’ three-month savings deposits.

Average monthly inflation during preceding quarter, and seasonally adjusted.

Average depreciation during preceding quarter, annualized.

Table 23.Vietnam: Exchange Rate Developments, 1995-2001
1995199619971998199920002001 1/
(Twelve-month average; 1990 = 100)
Effective exchange rates
Nominal42.243.945.146.742.342.142.4 2/
Real122.9131.1135.5146.4137.0133.1131.4 2/
(Annual percentage change; - depreciation)
Nominal-5.64.02.83.7-9.5-0.40.6 2/
Real6.56.63.48.1-6.5-2.8-1.3 2/
(In units indicated)
Dong per U.S. dollar, end of period11,01511,15012,29213,89614,02814,51415,033
Dong per U.S. dollar, 12-month average11,03811,03311,70613,29713,94414,17014,749 3/
Dong per SDR, end of period16,37215,88916,58519,56619,25418,91019,225
Dong per SDR, 12-month average16,73916,01715,63118,03819,06618,687
(Annual percentage change, - depreciation)
Dong per U.S. dollar, end of period0.3-1.2-10.2-13.0-0.9-3.5-3.6
Dong per U.S. dollar, 12-month average-0.60.0-6.1-13.6-4.9-1.6-4.1 3/
Dong per SDR, end of period-1.52.9-4.4-18.01.61.8-1.7
Dong per SDR, 12-month average-6.74.32.4-15.4-5.72.0
Sources: Vietnamese authorities; and IMF, Information Notice System, and staff estimates.

As of end October 2001, unless indicated otherwise.

As of end-August 2001.

For the period January to October 2001.

Sources: Vietnamese authorities; and IMF, Information Notice System, and staff estimates.

As of end October 2001, unless indicated otherwise.

As of end-August 2001.

For the period January to October 2001.

Table 24.Vietnam: Balance of Payments, 1995-2000(In millions of U.S. dollars, unless otherwise indicated)
199519961997199819992000
Estimate
Current account balance-2,648-2,431-1,664-1,0671,285642
Excluding official transfers-2,801-2,581-1,839-1,2391,154506
Trade balance-3,155-3,143-1,315-9811,080378
Exports, f.o.b.5,1987,3379,1459,36511,54014,449
Imports, f.o.b.8,35310,48010,46010,34610,46014,071
Non-factor services (net)159-61-623-539-547-615
Receipts2,4092,7092,5302,6042,4932,695
Payments2,2502,7703,1533,1433,0403,310
Invesment income (net)-279-427-611-669-429-597
Receipts96140136133142185
Payments375567747802571782
Transfers (net)6271,2008851,1221,1811,476
Private4741,0507109501,0501,340
Official153150175172131136
Capital account balance2,3262,0791,662216-334-772
Gross foreign direct investment (FDI) inflows2,2761,8132,074800700800
Equity1,2878911,002240301320
Loan disbursements9899211,072560399480
FDI loan repayments855174372603501
Medium and long-term loans (net)-25398375432605729
Disbursements4437721,0071,1211,0361,411
ODA loans1893365507969701,361
Commercial loans2544364573266650
Scheduled amortization696674632690431582
Short term capital (net)311224-612-644-1,036-1,700
Errors and omissions2841-2327-183247
Overall balance-38-351-4-524768116
Financing383514524-768-116
Change in net foreign assets of the State Bank of Vietnam (-, increase)-390-190-319-15-1,316-116
of which: Change in net international reserves00-21490-938-342
Use of Fund credit (net)92178-54-78-26-21
Other NIR-482-368-160168-912-321
Arrears and rescheduling 1/428541323126548-9,691
Debt relief 1/00041309,691
Financing gap000000
Memorandum items:
Gross official reserves, inducing gold1,3761,7971,8581,7652,7113,030
In weeks of next year’s imports5.46.97.26.88.18.6
Ratio to short term external debt (in percent) 2/204.1284.2269.4409.6397.5654.9
Current account balance (in percent of GDP)28.831.0-6.2-3.94.52.1
Excluding official transfers28.831.0-6.9-4.64.01.7
Export value growth (annual percentage change)28.241.124.62.423.225.2
Import value growth (annual percentage change)41.125.5-0.2-1.11.134.5
Sources: Viemamese authorities; and staff estimates and projections.

London Club rescheduling was concluded in early 1998. Restructuring of the Russian debt was concluded in September 2000 or. comparable term to the 1993 Paris Club rescheduling.

Short-term debt by remaining maturity refers to non-equity claims falling due over the next period.

Sources: Viemamese authorities; and staff estimates and projections.

London Club rescheduling was concluded in early 1998. Restructuring of the Russian debt was concluded in September 2000 or. comparable term to the 1993 Paris Club rescheduling.

Short-term debt by remaining maturity refers to non-equity claims falling due over the next period.

Table 25.Vietnam: Merchandise Exports by Commodity, 1995-2000
199519951997199819992000
Estimate
(In millions of U.S. dollars, unless otherwise indicated)
Total exports, f.o.b.5,1987,3379,1459,36511,54014,449
(annual percentage change)28.241.124.62.423.225.2
(Excluding oil)4,1745,9917,7228,1329,44810,946
(annual percentage change)30.943.528.95.316.215.9
Crude oil1,0241,3461,4231,2322,0923,503
Volume (’000 tons)7,5938,7059,63812,14514,88215,424
Unit value (US$/ton)135154148101141227
Coal901551111029694
volume (’000 tons)2,6203,6473,4543,1623,2593,251
Unit value (US$/ton)343232322929
Rubber159163191127146166
Volume (’000 tons)132122195191263273
Unitvalue (US$/ton)1,2081,336980667556608
Rice4968558701,0201,025667
volume (’000 tons)1,9223,0033,5533,7304,5083,477
unitvalue (US$/ton)258285245273227192
Coffee565337498594585501
Volume (000 tons)241239392382482734
Unit value (US$/ton)2,3481,4101,2711,5541,213683
Marine products (including frozen items)43165l7828589741,479
Garments4311,1501,5031,4501,7461,892
Footwear2005319781,0311,3871,465
Handicrafts7079121111168237
Electronic goods and components440497589783
Other1,7322,0712,2282,3422,7363,662
(In percent of value of total experts)
Crude oil19.718.315.613.218.124.2
Coal1.72.11.21.10.80.7
Rubber3.12.22.11.41.31.1
Rice9.511.79.510.98.94.6
Coffee10.94.65.46.35.13.5
Marine products8.38.98.69.28.410.2
Garments8.315.716.415.515.113.1
Footwear3.87.210.711.012.010.1
Handicrafts1.31.11.31.21.51.6
Electronic goods and components4.85.35.15.4
Other33.328.224.425.023.725.3
(In percentage points of growth in the value of exports)
Crude oil3.96.21.1-2.19.212.2
Coal0.41.2-0.6-0.1-0.10.0
Rubber0.60.10.4-0.70.20.2
Rice1.76.90.21.6-0.1-3.1
Coffee5.8-4.42.21.1-0.1-0.7
Marine products-3.04.21.80.81.24.4
Garments-1.113.84.8-0.63.21.3
Footwear1.96.46.10.63.80.7
Handicrafts1.70.20.6-0.10.60.6
Electronic goods and components0.60.91.7
Other16.16.52.11.24.28.0
Sources: Ministry of Trade and Customs Office: and staff estimates.
Sources: Ministry of Trade and Customs Office: and staff estimates.
Table 26.Vietnam: Merchandise Imports by Commodity, 1995-2000
199519961997199819992000
Estimate
(In millions of U.S. dollars, unless otherwise indicated)
Total imports, C.I.F8,38111,64411,62211,52711,74215,200
(annual percentage change)43.838.9-0.2-0.81.929.4
Petroleum products (gesoline, diesel, etc.)7241,0791,1238321,0472,058
Volume (’000 tons)4,3915,8036,8526,8527,4258,777
Unit value (US$/ton)165186164121141234
Fertilizer554628440474458509
Volume (’000 tons)2,5082,8322,5263,4483,7023,973
Unit value (US$/ton)221222174137124128
Insecticide668911492133137
Volume (’000 tons)30602224
Unit value (US$ton)2,2131,4845,1683,793
Steel and iron389525510535626811
Volume (’000 tons)1,1261,5491,4011,7862,2542,868
Unit value (US$/ton)345342364299278283
Cement8481522
Volume (’000 tons)1,4591,30287850
Unit value (US$/ton)57625942
Motorcycles423434233351386787
Volume (’000 unit)4044722473345021,807
Unit value (US$/unit)1,048919944915768436
Motor cars nod trucks14815513813098134
Volume (’000 units)24.519.114.017.211.315.7
Unit value (US$/unit)6,0548,1319,8557,5728,7368,507
Wheat Flour659042623216
Volume (’000 tons)23329615227115986
Unit value (US$/ton)279303275228198191
Textile yarn (fibers)134158159188192231
Volume (’000 tons)527477130160176
Unit value (US$/ton)2,5922,1282,0701,4451,2001,313
Cotton9166679183101
Leather and garment material3055318978211,0961,334
Cigarette material (including tobacco)83788011188112
Machinery and equipments (including aircraft)2,0973,8001,7772,1872,0052,482
Other3,2193,9265,9905,6515,4976,487
(In percent of value of total imports)
Petroleum products8.69.39.77.28.913.5
Fertilizer6.65.43.84.13.93.3
Insecticide0.80.81.00.81.10.9
Steel and iron4.64.54.44.65.35.3
Cement1.00.70.40.0
Motorcycles5.03.72.03.03.35.2
Motor cars and trucks1.81.31.21.10.80.5
Wheat flour0.80.80.40.50.30.1
Textile yarn1.61.41.41.61.61.5
Cotton1.10.60.60.80.70.7
Leather and garment material3.64.67.77.19.38.8
Cigarette material1.00.70.71.00.80.7
Machinery and equipment25.032.615.319.017.116.3
Other38.433.751.549.046.842.7
Sources: Ministry of Trade end Customs Office: and staff estimates.
Sources: Ministry of Trade end Customs Office: and staff estimates.
Table 27.Vietnam: Direction of Trade, 1995-2000 1/(In percent of total exports or imports)
199519961997199819992000
Exports
Industrial countries or regions66.068.467.273.173.464.4
Japan26.821.318.218.017.618.1
Hong Kong SAR4.74.34.72.41.82.2
Korea4.37.74.51.91.72.4
Singapore12.717.813.24.44.76.1
France3.12.02.65.85.22.6
Germany4.03.14.59.29.05.1
Italy1.00.71.32.82.71.5
Netherlands1.52.02.92.52.32.7
Switzerland1.12.13.60.60.61.2
United Kingdom1.41.72.94.24.43.3
Other Europe (industrialized) 2/0.91.42.28.17.84.5
United States3.12.83.26.25.85.1
Canada0.30.40.71.41.30.7
Australia1.00.92.55.48.48.8
New Zealand0.00.10.20.30.20.1
Developing countries34.031.632.826.926.635.6
China (mainland)6.64.75.22.23.010.6
Indonesia1.00.60.50.60.51.7
Malaysia4.37.74.51.91.72.4
Philippines0.81.82.64.23.83.3
Russia1.51.21.40.60.20.8
Taiwan POC8.17.48.93.53.25.2
Thailand1.91.52.62.42.22.7
Other9.96.77.111.412.08.8
Imports
Industrial countries or regions61.567.856.758.158.460.5
Japan11.211.313.011.814.114.4
Hong Kong SAR5.17.15.24.53.93.9
Korea15.416.013.512.112.411.1
Singapore17.518.218.413.412.917.7
France3.43.74.82.72.72.1
Germany2.22.62.43.22.21.9
Italy0.71.00.91.01.01.0
Netherlands0.40.50.40.30.30.6
Switzerland0.91.31.20.50.50.7
United Kingdom0.60.80.91.01.11.0
Other Europe (industrialized)2/0.91.41.62.32.41.8
United States1.62.22.22.42.52.2
Canada0.30.30.30.30.30.2
Australia1.21.21.72.11.81.9
New Zealand0.00.20.20.40.40.0
Developing countries38.532.233.341.941.639.5
China (mainland)4.03.03.59.18.69.1
Indonesia2.31.31.72.12.02.2
Malaysia2.31.82.03.33.32.5
Philippines0.30.30.30.80.80.4
Russia1.81.71.42.41.41.5
Taiwan POC11.111.312.810.811.012.1
Thailand5.44.45.05.35.45.2
Other11.38.46.78.19.06.5
Memorandum items:
European Union
Exports11.910.916.132.130.919.6
Imports8.19.911.010.49.68.3
ASEAN 3/
Exports20.629.423.813.913.216.7
Imports27.826.127.825.424.928.7
Sources: Customs Office; IMF, Direction of Trade Statistics, and staff estimates.

For 1998-2000, some data reflect partner country data.

Defined as Austria, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Luxembourg, Norway, Portugal, Spain, and Sweden.

Including Lao PDR and Myanmar beginning in 1997 and Cambodia in 1999.

Sources: Customs Office; IMF, Direction of Trade Statistics, and staff estimates.

For 1998-2000, some data reflect partner country data.

Defined as Austria, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Luxembourg, Norway, Portugal, Spain, and Sweden.

Including Lao PDR and Myanmar beginning in 1997 and Cambodia in 1999.

Table 28.Vietnam: Commitments of Foreign Direct Investment, 1995-2000 1/
199519961997199819992000
(in millions of U.S. dollars)
Industry3,1113,0491,840850839625
Heavy industries1,8191,422984607451277
Export processing zones 2/12246208
Light industries814889455186177275
Food4664921935721172
Oil and gas053511,358431,231
Construction58482471216121440
Transportation and communications3797551,0613051378
Real estate2,5054,07959690816323
Hotels and tourism9071401807864323
Office property and apartments1,5983,9394161231200
Agriculture, forestry, and fisheries63334833314211892
Services28522125229719096
Total7,4969,3294,8454,0211,7042,114
(In percent of total)
Industry41.532.738.021.149.229.5
Heavy industries24.315.220.315.126.513.1
Export processing zones0.22.64.3
Light industries10.99.59.44.610.413.0
Food6.25.34.01.412.43.4
Oil and gas0.00.61.133.82.558.2
Construction7.88.814.74.012.51.9
Transportation and communications5.08.121.97.68.10.4
Real estate33.443.712.322.69.61.1
Hotels and tourism12.11.53.719.52.51.1
Office property and apartments21.342.28.63.17.00.0
Agriculture, forestry, and fisheries8.43.76.93.56.94.4
Services3.82.45.27.411.24.5
Total100.0100.0100.0100.0100.0100.0
Sources: Ministry of Planning and Investment (MPI) and State Bank of Vietnam; and staff estimates.

As reported by MPI. Includes investments by domestic joint venture partners.

Data incomplete from 1998 onwards.

Sources: Ministry of Planning and Investment (MPI) and State Bank of Vietnam; and staff estimates.

As reported by MPI. Includes investments by domestic joint venture partners.

Data incomplete from 1998 onwards.

Table 29.Vietnam: Disbursements of Foreign Direct Investment, 1995-2000 1/
199519961997199819992000
(In millions of U.S. dollars)
Industry8011,1411,326922835910
Heavy industries314478701491424445
Export processing zones3413688434914
Light industries267412363225182326
Food186116174164178126
Oil and gas567377261375345205
Construction133261407198152221
Transportation and communications155821018010628
Real estate433421488471340299
Hotels and tourism261289227233128164
Office property and apartments172132261237212135
Agriculture, forestry, and fisheries130113234124192208
Services1209561777187
Total disbursements2,3412,4902,8782,2462,0411,959
Total disbursements: staff estimates 2/2,2761,8132,074800700800
(In percent of total)
Industry34.245.846.141.040.946.5
Heavy industries13.419.224.421.820.822.7
Export processing zones1.45.43.11.92.40.7
Light industries11.416.612.610.08.916.6
Food8.04.66.07.38.76.4
Oil and gas24.215.19.116.716.910.5
Construction5.710.514.18.87.411.3
Transportation and communications6.63.33.53.65.21.4
Real estate18.516.917.020.916.715.3
Hotels and tourism11.211.67.910.46.38.4
Office properly and apartments7.45.39.110.610.46.9
Agriculture, forestry, and fisheries5.64.68.15.59.410.6
Services5.13.82.13.43.54.5
Total100.0100.0100.0100.0100.0100.0
Memorandum item:
Total disbursements (in percent of GOP)11.310.110.78.37.26.5
Sources: Ministry of Planning and Investment (MPI); and staff estimates.

Data on disbursements classified by industry as reported by MPL. Calculated as total reported disbursements less equity contribution of domestic partners. Thus, data include domestic borrowing by the joint venture. Data are subject to extensive revision.

Staff estimates are based on reported foreign equity inflows plus foreign borrowings by joint ventures, as reported by the State Bank of Vietnam. For 1998-2000, also based on other indicators of investment inflows.

Sources: Ministry of Planning and Investment (MPI); and staff estimates.

Data on disbursements classified by industry as reported by MPL. Calculated as total reported disbursements less equity contribution of domestic partners. Thus, data include domestic borrowing by the joint venture. Data are subject to extensive revision.

Staff estimates are based on reported foreign equity inflows plus foreign borrowings by joint ventures, as reported by the State Bank of Vietnam. For 1998-2000, also based on other indicators of investment inflows.

Table 30.Vietnam: Foreign Direct Investment by Country of Origin, 1995-2000 1/
CommitmentsDisbursements
199519961997199819992000
(In millions of U.S. dollars)
Singapore9693,046532315257258
Taiwan POC934683280213193362
Korea677978686219217125
Japan1,412827801509436400
British Virgin Islands8001,43122811366142
Hong Kong SAR158463241153146192
Malaysia1999317415112389
Thailand272130276821928
United States524152275654568
France1481018909311553
Australia105497213428
Other1,3011,377455314389213
Total7,4969,3294,8452,2462,0411,959
(In percent of total)
Singapore12.932.711.014.012.613.1
Taiwan POC12.57.35.89.59.518.5
Korea9.010.514.19.810.66.4
Japan18.88.916.522.621.420.4
British Virgin Islands10.715.34.75.03.27.2
Hong Kong SAR2.15.05.06.87.29.8
Malaysia2.61.03.66.76.04.5
Thailand3.61.45.73.71.01.4
United States7.01.65.72.92.23.5
France2.01.118.44.15.62.7
Australia1.40.50.10.91.71.4
Other17.414.89.414.019.010.9
Total100.0100.0100.0100.0100.0100.0
Sources: Ministry of Planning and Investment (MPI); and staff estimates.

Data as reported by MPI. See Table 29 for qualifications.

Sources: Ministry of Planning and Investment (MPI); and staff estimates.

Data as reported by MPI. See Table 29 for qualifications.

Table 31.Vietnam: External Debt and Debt Service Obligations, 1995-2000 1/
199519961997199819992000
Estimate
(In millions of U.S. dollars, end of period)
Total convertible currency debt stock7,1458,7979,5789,8479,75611,915
Medium- and long-term debt stock6,3647,7929,1859,1739,19911,387
Public sector (convertible debt only)4,4655,0235,5625,5085,9788,619
Of which:
State-owned enterprises 2/238525885974787539
IMF377539452391355312
Private sector1,8982,7693,6233,6653,2212,767
FDI-related1,7962,5443,2443,2482,8842,537
Other102225379418337231
Short-term debt stock7811,005393674557528
Total external debt service1,0441,3001,4951,6631,7981,912
Principal7528801,0541,2191,3731,420
Interest292420440444425492
Public debt8851,005918854757774
Principal693699656603510471
Interest193306262250247303
Private debt1592955768091,0411,138
Principal60182398615863949
Interest99113178194178189
(In percent of GDP)
Total debt service5.05.35.66.16.36.3
of which: public4.34.13.43.12.72.6
Total convertible currency debt slock34.535.735.736.334.239.3
of which: public21.520.420.820.321.028.4
(In percent of exports of goods and nonfactor services)
Total debt service12.112.912.813.912.811.2
of which: public11.48.47.57.74.34.8
Total convertible currency debt stock93.987.682.082.369.569.5
of which: public58.750.047.646.042.650.3
Memorandum item:
Nonconvertible Russian debt 3/10,59710,22710,32610,51510,5150
Sources: Vietnamese authorities; and staff estimates.

Convertible currency debt only.

Includes loans to state-owned enterprises not classified elsewhere.

In millions of transferable rubles. Restruciuring of nonconvertible Russian debt was concluded in September 2000.

Sources: Vietnamese authorities; and staff estimates.

Convertible currency debt only.

Includes loans to state-owned enterprises not classified elsewhere.

In millions of transferable rubles. Restruciuring of nonconvertible Russian debt was concluded in September 2000.

Table 32.Vietnam: Summary of Normal Tariff Schedule, 1999-2001 1/
Rates in 1999Rates in 2000Rates in 2001
BandsNumber of lines:BandsNumber of lines:BandsNumber of lines:
numberpercentnumberpercentnumberpercent
01,96532.402,02932.002,07032.4
11482.411732.711702.7
33746.233816.033495.5
561610.2567910.7567710.6
104487.4770.1730.0
15581.0105198.2105508.6
205318.81220.01230.0
3066310.915791.215681.1
4061710.21810.0205027.9
505749.5205168.12550.1
60340.62530.03066310.4
100280.53063310.03510.0
4067810.74067110.5
4520.04520.0
505699.0505759.0
5510.060110.2
60120.28020.0
8090.1100500.8
100480.812080.1
Total6.056100.0Total6,341100.0Total6,380100.0
Number ofbands121919
Average 2/15.515.4
Standard deviation 217.718.1
Source: Ministry of Finance.

The normal tariff rates are termed preferential in the official schedule. There are also nonpreferetial tariff rates about 50 percent higher than these rates, which are applied to imports from countries without a trade agreement (or not in the process of negotiating one).

Based on actual trade flows.

Source: Ministry of Finance.

The normal tariff rates are termed preferential in the official schedule. There are also nonpreferetial tariff rates about 50 percent higher than these rates, which are applied to imports from countries without a trade agreement (or not in the process of negotiating one).

Based on actual trade flows.

Table 33.Vietnam: Common Effective Preferential Tariff (CEPT) Rates, 1999-2001 1/
Rates in 1999Rates in 2000Rates in 2001
BandsNumber of lines:BandsNumber of lines:BandsNumber of lines:
numberpercentnumberpercentnumberpercent
01,52342.701,69039.901,76335.4
1822.311553.711713.4
33329.333357.933336.7
410.0400.0596219.3
556115.7578318.5730.1
7200.67100.21067613.6
102617.31057313.51210.0
1547013.2151293.0151332.7
20250.7201072.52094418.9
25240.725130.3
30330.930721.7
3530.1352806.6
402316.540821.9
4510.04510.0
5030.1
Total3,567100.0Total4,233100.0Total4,986100.0
Average 2/7.17.3
Standard deviation 110.610.7
Source: Ministry of Finance.

Under Vietnam’s current ASEAN Free Trade Area (AFTA) agreement.

Based on actual trade flows.

Source: Ministry of Finance.

Under Vietnam’s current ASEAN Free Trade Area (AFTA) agreement.

Based on actual trade flows.

V. Vietnam: Summary of the Tax System as October 1, 2001
Nature of the taxTax deductions and exemptionsRates
1. Personal Income Tax and Enterprise Income Tax
1.1. Personal Income Tax
(a) Regular income (in cash or kind).Individual investors are exempted for 5-10 years born income tax applicable to income earned by contributing capital and purchasing shares in business.For Vietnamese citizens:
-salaries and wages
- allowancesMonthly income (VNI million)Marginal rate
- bonusesInvestors are exempted from income tax applicable to income earned by contributing capital through intellectual property rights, technical knowledge, or technological processes.0-30%
- non-salary income that is not subject to corporate income tax3-610%
6-920%
9-1230%
Excluded are:12-1540%
- interest and divided income15 or more50%
- rental income
social benefitx, insurance compensations, and severance allowances.For resident foreigners and for Vietnamese citizens on mission, working overseas, or working; in software services/production.
- Income of nonresidents staying in Vietnam for fewer than 30 days
Monthly income (VNI) million)Marginal rate
- social and health insurance contributions deducted from salaries and wages0-80%
8-2010%
- remuneration for technical innovation/invention20-5020%
- business travel expenses; allowances for shift work, fix working under noxious or dangerous conditions or in mountainous areas; and on stipulated offshore islands50-8030%
80-12040%
120 or more50%
For non-resident foreigners: flat rate of 25% on Vietnam-sourced income.
For Vietnamese citizens and resident foreigners, the following marginal rates apply on irregular income:
Income (VND) million)Scale rate
0-20%
2-45%
41010%
10-2015%
20-3020%
30 or more30%
(b) Irregular income
- gifts in kind from overseasGifts: Flat 5% (nil for less than or equal to VND 2 million)
- lottery winningsLottery winnings: Flat 10% (nil for less than or equal to VND 12.5 million)
- fees or commissions from copyrights, technology and knowledge transfers, and on industrial and construction design.
Fees and commissions Flat 5% (nil for less than or equal to VND 2 million)
1.2. Supplementary Income Tax
Levied on monthly income above VND 15 million net of regular income tax payment.Non-citizens and Vietnamese citizens on mission, working overseas, or working in software services/production are exempted30% of act income in excess of VND 15 million per month.
1.3.1. Corporate Income Tax
Taxable income defined as total revenue, less, total deductible expenses of the enterprise, plus any other income such as rents, proceeds from the transfer or liquidation of assets, profits earned from business operations abrond and profits from financial dealings.



Deductible expenses are:

  • - costs of raw and other materials and energy required for the manufacture of principal products and as products or for the provision of services

  • - wages, salaries, and allowances

  • - depreciation of fixed assets

  • - costs of research and development

  • - interest payments (subject to certain limitations)

  • - severance payments

  • - expenses incurred for employee safety

  • - taxes (other than profit tax or profit remittance tax)

  • - fees on land rental related in business activities.

  • - social and health insurance and trade union expenses

  • - provisions for devaluation of inventory and bad debts

  • - costs of outsourced services, including water and electricity, acquisition of or the right to use any technical document patents, licenses, or trademarks; insurance; management and consulting services.

  • - costs for sale and distribution of goods and provision of services, including expenses for storage, packaging, transportation, warranty, and so forth

  • - advertising, promotion, and other expenses, subject to caps of 3%, 5%, or 1% of total amount of the above expenses depending on the business; sector

  • - head office administration expenses allocated to the business establishment in Vietnam (applicable to foreign economic organisations’ branches in Vietnam)

  • - any losses brought forward from previous years (the maximum period for the loss carry forward is five years from the loss making year)

  • Expenses unrelated to turnover and taxable income, fines and penalities, payments unsupported by proper documents, and expenditures covered by other sources are not deductible for corporate income tax purposes.

Tax exemptions are granted to:



(a) farmers and households engaged in farming, livestock, or fishing activity, whose earnings are less than VND 90 million per year or income less than VND 36 million per year are exempt from the Corporate Income Tax

(b) newly founded domestic business establishments for the first profit-making year, and thereaftet a 50% reduction of tax for certain periods

(c) domestic business establishments on income earned from scientific research; provision of technical services for agriculture; production by disabled workers; and vocational training of disabled persons, ethnic minorities, and children living under particularly difficult conditions.



Tax reductions are available for domestic business establishments and foreign invested enterprises that engage in manufacturing, construction and transportation sectors and employ a considerable number of female workers. The tax reduction is equivalent to certain actual payments to female workers.



Tax exemptions or reductions are available for establishment of production, “build, transfer, and operate” (BTO) contracts; or “build, operate, and transfer” (BOT) contracts; investment projects in regions with dificult economic and social conditions, and for the following investment projects:



(a) afforestation and forest planting

(b) infrastructure and public transport

(c) education, health care, or culture

(d) export production and trading

(e) agricultural and maritime development

(f) science, business management, or technology transfer

(g) production reform or relocation

(h) developing preferential professions.



Investors of export products production and export products trading establishments receive additional reductions as follows:



(a) 50% reduction in first year when export is 9 Dew product, or when the export gues to a new market

(b) 50% reduction in the year when export turnover exceeds that the previous year

(c) 20% reduction in the year when export earnings exceed 50% of turnover, or in the third consecutive year of stable export markets

(d) additional 25% reduction of the tax on income from exports in the above-listedcases if projects in regions with difficult economic and social conditions
Standard rate: 32%

Oil sector standard rate: 50%



For mining, forestry, fishery, metallurgy, mechanical manufacture, basic chemicals, fertilizer, pesticides, construction materials (excluding cement), construction (excluding certain related industries), and transportation (excluding airway and taxi), a 25% rate will be applied until January 1, 2002.



For other resource-exploitation sectors, a 32-50% rate will be decided by Ministry of Finance (MoF) or foreign investment license issuing authority with the agreement of MoF.



Preferential rates (25%, 20% and 15%) are offered depending on industries and areas of investment.



BOT, BTO and “build, transfer” (BT) projects: 10%
1.3.2. Corporate Income- Tax on Foreign Invested Enterprises and Foreign parties Business Cooperation Contracts (BCCs)
As 1.3.1.: a BCC is a business contract between a foreign investor and domestic partner that does not involve setting up a legal entity in Viemam.Tax holidays are granted for joint ventures and wholly foreign-owned companies (excluding hotel, office, or apartment building projects that do not belong to investment encouragement areas or whose assets are not transferred to the Vietnamese government on a non-recourse basis). Projects in banking, financial, insurance, trading, and services sectors outside EPZs or industrial or high -tecb parks may be considered for tax holidays The holidays take the form of a complete exemption from profit tax for a certain period beginning immediately after the project becomes profitable, followed in turn by a period where tax is charged at one-half the a greed preferential rate. The duration of the holiday period depends on tax rate applicable to the project as follows:Standard rate: 25%

Oil: 50%



Preferential rates of 20%, 15%, and 10% are available for inward investment upon the granting of an investment license.



The following ratec are available for 10-15 years upon commencement of business activity:


(a) projects subject to 20% rate may be considered for one year’s exemption, followed by up to two years at 10% rate

(b) projects subject to 15% rate may be considered for two years’ exemption, followed by up to three years ac 7.5% rate

(c) projects subject to 10% rate may be considered for four years’exemption, followed by up to four years at 5% rate, except those projects exempted from the corporate income tax for 8 years.

(d) BOT, BTO and BT projects in investment: encouragement areas and high-tech enterprises, technological service enterprises in high-tech areas, afforestation or infrastructure projects in especially difficult areas, large-scale projects having substantial socioeconomic impact, and projects on the special investment encouragement list obtain an an exemption for 8 years after becoming profitable.



Investors who reinvest profits earned from investment in Vietnam are refunded part of or all Corporate Income Tax paid on the reinvested profits if the following conditions are met:



(a) reinvestment is made in projects that enjoy preferential Corporate Income Tax treatment

(b) capital reinvested is used at least 3 years.

(c) contribution of legal capital or capital to a BCC has beers fulfilled



Levels of the refunded Corporate Income Tax on reinvested profits are:



(a) 100% if profits are reinvested in projects that enjoy the corporate income tax rate of 10%

(b) 75% if profits are reinvested in projects that enjoy a rate of 15%

(c) 50% if reinvested in projects that enjoy a rate of 20%.
(a) 20% for 10 years for projects meeting at one of the following criteria

  • - service enterprises in an IZ

  • - non-oil projects and projects that do not fall into categories (b) and (c) below.





(b) 15% for 12 years for projects meeting one of the following criteria:

  • - projects on the investment encouragement list, including:

  • (i) with at least 50%. of production for export

  • (ii) with at least 30% of production for export and consumption of domestic materials (representing at least 30% of production cost)

  • (iii) for projects using substantial Vietnamese natural resources and workers

  • (iv) for processing of agricultural, forestry, and marine products

  • (v) for heavy industry such as refining metals and producing primary chemicals: for refined oil products and fertilizer: for heavy metal engineering; and for production of car and motorbike components and electronic parts and accessories.

  • (vi) infrastructure construction and operation projects

  • (vii) projects in areas under difficult socioeconomic conditions

  • (viii) service projects in EPZs

  • (ix) projects in industrial parks that export more than 50% of products

  • (x) projects in which the a foreign party undertakees a transfer of assets to the Vietnamese government on a non recourse basis at the end of the operating period.





(c) 10% for 15 years for projects meeting one of the following criteria:

  • - projects meeting two of the criteria in category (b)

  • - projects on the investment encouragement special Int. including:

  • (i) at least 80% of production for export

  • (ii) processing of agricultural, forestry, and marine products with at least 50% of production for export

  • (iii) production of new quality hybrid seeds

  • (iv) projects in agriculture, forestry, and fisheries

  • (v) manufacture of new materials, application of new biological technologies, and application of new technologies for the manufacture of telecommunications equipment

  • (vi) high-tech industries

  • (vii) investment in research and development

  • (viii) manufacture of waste treatmentt equipment

  • (ix) production of materials for antibiotic medicine

  • (x) pollution and waste treatment and environmental protection

  • (xi) BOT, BTO and BT projects

  • - projects in areas under difficult or socioeconomic conditions and on the investment encouragement list.

  • - enterprises engaged in development of infrastructure in industrial parks. BIZs, and high-tech parks.

  • - export processing enterprises

  • - projects In areas of medical care and examination, education, and scientific research

Preferential tax rate shall be applied during; the whole duration of some special projects if one of the following conditions is met

  • - projects on the investment encouragement special list

  • -projects on the investment encouragement list and located in regions with especially difficult socio-economic conditions

  • - projects for development of infrastructure in industrial parks. EPZs, and high-tech parks

  • - projects in an industrial parks, EPZs, and high-tech parks

  • - projects In areas of medical care and examination, education, and and scientific research.

Overseas Vietnamese investing in Vietnam under the Law on Foreign Investment shall enjoy 20% reduction of corporate income tax for the same type of projects, except for projects that sub ject to 10% rate.
1.3.3. Corporate Income Tax on Foreign Contractors

  • For contractors who do not register for and apply Vietnamese Accounting System (VAS). Based on value of contract with Vietnamese party. Corporate income tax. payable is equal to taxable turnover multiplied by deemed corporate income tax rates.

  • Contractors who register for and apply VAS shall pay corporate income tax in accordance with the regulations mentioned in section 1.3.1.

Tax rates:



Trading businesses: 1%

Transportation, Construction (including survey, design, and supervision), and production: 2%

Services: 5%

Interest and income from copyright. 10%.
1.3.4 Corporate Income Tax on Foreign Economic Organizations Branches in Vietnam

  • Asia 1 3 1: admistrative expenses allocated by the head office also are deductible for corporate income tax purposes. Deduction inpayments to head office and its affiliated branches in the form of royalites, fees for use of patents, and interest payments on loans are disallowed. For branches of foreign credit institution; interest payments received by the institutions are deductible for corporate income tax purposes.

32%
1.4. Additional Income Tax

  • Levied on after-tax income in excess of 20% of the owners capital.

Additional income tax shall not be imposed on:

  • - foreign invested enterprises

  • - preferential investment projects that are entitled to corporate income tax rates of 25%, 20%, and 15%

  • - business establishments exporting more than 50% of their products or with export revenue exceeding 50% of local revenue.

25%
1.5. Withholding Profit Remittance Tax
  • Income earned by foreign investors from investments in Vietnam (including refunded corporate income tax for investments and gains from capital transfers) are taxable when remitted overseas or retained outside Vietnam.

Foreign economic organizations branches in Vietnam are not liable for the profit remittance tax.(a) 3% for;
  • - overseas Vietnamese who invest in Vietnam under the Law on Foreign Investment in Vietnam

  • - foreigner investors in an industrial parks, EPZs, or a high-tech parks

  • - foreign investors with legal capital contribution or capital contribution for the implementation of a HOC of US$5-10 million

  • - investment projects in regions under especially difficult socio-economi