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News Release

Vietnam

Property Market 1H 2017

Vietnam's economy records positive growth


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Vietnam's economy records positive growth: In the first half of 2017, Vietnam's GDP growth was estimated at 5.7%, higher than the 5.5% in 1H16, according to the General Statistics Office. In terms of econo​mic structure, the agriculture, forestry and fishery sector witnessed growth of 2.7% y-o-y despite the effects of harsh climatic and environmental disasters. The industrial and construction sector grew by 5.8% y-o-y, lower than the 7.1% in 2016 owing to a significant decline in the mining sector. Meanwhile, by end-2Q17, the service sector recorded record growth of more than 6.9% y-o-y, the highest figure since 2012.

Retail sales and international arrivals increase sharply: Vietnam's retail sales and service turnover in the January-June period soared to 10.1% y-o-y. According to the Vietnam National Administration of Tourism, the number of international tourist arrivals to Vietnam sharply increased by 30.2% compared with the same period last year, reaching more than 6.2 million visitors, as of 2Q17. Amid countries and territories, China remained the leading source with nearly 1.9 million visitors, an impressive growth of 56.7% over the same period in 2016. Russia ranked second in the key source countries for international tourists to Vietnam, rising by 53.4% y-o-y. Recently, the Vietnam Government has extended a visa waiver programme for five European countries - the United Kingdom, Germany, France, Italy and Spain - along with implementing promotions in an attempt to attract more potential markets.

FDI continues upswing: Vietnam lured USD 19.2 billion of FDI in the 1H2017, representing a rise of 54.8% y-o-y. There were 1,183 newly licensed projects worth USD 11.8 billion. FDI disbursement reached USD 7.7 billion, an increase of 6.5% y-o-y. The processing and manufacturing sector attracted the highest capital at USD 9.5 billion, accounting for 49.3% of total FDI, followed by electricity, gas and air conditioning supply at USD 5.3 billion, mining at USD 1.3 billion and the wholesale and retail sector at more than USD 0.9 billion. Meanwhile, real estate was in the fifth position with a total investment capital of USD 0.7 billion  in which 39 project were newly registered, worth USD 0.5 billion. By country, Japan was the largest foreign investor in the period with USD 5.1 billion, followed by South Korea with more than USD 4.9 billion and Singapore with USD 3.5 billion. The largest-scale projects licensed include the USD 2.8 billion Nghi Son 2 power plant (Japan) in Thanh Hoa, Samsung Display Vietnam (South Korea) worth USD 2.5 billion in Bac Ninh and the USD 1.3 billion USD B-O Mon gas pipe project (Japan) in Kien Giang.

CPI to record slower growth in June: Vietnam's CPI as at late June witnessed growth of 2.5% y-o-y, yet a minor decrease of 0.2% m-o-m. The overall CPI saw an average increase of 4.2% for the first six months in 2017 versus the same period in 2016. Among 11 groups of products and services, the medical and health service sector and the education sector continued to have the highest growth rates, of 47.9% and 10%, respectively, compared with 2016. The CPI in housing and construction materials in the 1H2017 showed an upturn of 4.1% y-o-y. Meanwhile, the remaining groups grew gradually, with the transportation sector and beverages and tobacco products up 8.8% and 1.6%, respectively, for six months of 2017 compared to the same period last year.

Vietnam trade deficit to reach more than USD 2.7 billion: According to the General Department of Vietnam Customs, the country recorded a trade deficit of USD 2.7 billion in the first half of 2017. The import value was USD 100.5 billion, up 24.1% over the same period in 2016, while export revenue was estimated at USD 97.8 billion, up just 18.9% y-o-y. With regard to the major markets, the United States was still the largest export market with USD 19.6 billion, up 9.5% y-o-y, followed by the EU with USD 18.2 billion (up 12.6%) and China with USD 13 billion (up 42.5%). The country's Asian peers were the key import markets; China had an import value of USD 27.1 billion (up 16.8%), South Korea USD 22.5 billion (up 51.2%) and ASEAN USD 13.6 billion (up 17.6%).

The number of newly registered enterprises to grow: There were 61,276 newly registered enterprises recorded from the beginning of 2017 to end-June, up 12.4% in the number of enterprises and up 39.4% in registered capital compared with the same period in 2017. The capital of each newly established enterprise averaged about VND 9.7 billion, a rise of 24%. In addition, the real estate sector soared by 68.3% in the number of enterprises to more than 2.3 thousand firms, accounting for 3.7% of the total number of new enterprises. The number of enterprises that completed the process for dissolution decreased by 1.2% y-o-y to 5,443 and the number of enterprises that terminated business activity was 37,907 in the first six months of 2017, a marked increase of 21.8% from the same period of 2016.​​

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