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Vietnam - Economy (Facts)

Economy - overview: Vietnam is a densely-populated, developing country that in the last 30 years has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally-planned economy. Substantial progress was achieved from 1986 to 1997 in moving forward from an extremely low level of development and significantly reducing poverty. Growth averaged around 9% per year from 1993 to 1997. The 1997 Asian financial crisis highlighted the problems in the Vietnamese economy and temporarily allowed opponents of reform to slow progress toward a market-oriented economy. GDP growth averaged 6.8% per year from 1997 to 2004 even against the background of the Asian financial crisis and a global recession, and growth hit 8% in 2005 and 7.8% in 2006. Since 2001, however, Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration. They have moved to implement the structural reforms needed to modernize the economy and to produce more competitive, export-driven industries. Vietnam's membership in the ASEAN Free Trade Area (AFTA) and entry into force of the US-Vietnam Bilateral Trade Agreement in December 2001 have led to even more rapid changes in Vietnam's trade and economic regime. Vietnam's exports to the US doubled in 2002 and again in 2003. Vietnam joined the WTO in January 2007, following over a decade long negotiation process. This should provide an important boost to the economy and should help to ensure the continuation of liberalizing reforms. Among other benefits, accession allows Vietnam to take advantage of the phase-out of the Agreement on Textiles and Clothing, which eliminated quotas on textiles and clothing for WTO partners on 1 January 2005. Agriculture's share of economic output has continued to shrink, from about 25% in 2000 to 20% in 2006. Deep poverty, defined as a percent of the population living under $1 per day, has declined significantly and is now smaller than that of China, India, and the Philippines. Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year. Vietnamese authorities have tightened monetary and fiscal policies to stem high inflation. Hanoi is targeting an economic growth rate of 7.5-8% during the next five years. GDP - real growth rate: 8.2% (2006 est.) GDP (purchasing power parity): $262.8 billion (2006 est.) GDP (official exchange rate): $48.43 billion (2006 est.) GDP - per capita (PPP): $3,100 (2006 est.) GDP - composition by sector: agriculture: 20.1% industry: 41.8% services: 38.1% (2006 est.) Population below poverty line: 19.5% (2004 est.) Household income or consumption by percentage share: lowest 10%: 3.6% highest 10%: 29.9% (1998) Inflation rate (consumer prices): 7.5% (2006 est.) Labor force: 44.58 million (2006 est.) Labor force - by occupation: agriculture: 56.8% industry: 37% services: 6.2% (July 2005) Unemployment rate: 2% (2006 est.) Budget: revenues: $15.42 billion expenditures: $16.63 billion; including capital expenditures of $1.8 billion (2006 est.) Industries: food processing, garments, shoes, machine-building; mining, coal, steel; cement, chemical fertilizer, glass, tires, oil, paper Industrial production growth rate: 11.3% (2006 est.) Electricity - production: 40.11 billion kWh (2004) Electricity - consumption: 37.3 billion kWh (2004) Electricity - exports: 0 kWh (2004) Electricity - imports: 0 kWh (2004) Oil - production: 400,000 bbl/day (2005 est.) Oil - consumption: 230,000 bbl/day (2004 est.) Oil - exports: NA bbl/day Oil - imports: NA bbl/day Oil - proved reserves: 2.5 billion bbl (2006 est.) Natural gas - production: 6.342 billion cu m (2005 est.) Natural gas - exports: 0 cu m (2005 est.) Natural gas - imports: 0 cu m (2005 est.) Agriculture - products: paddy rice, coffee, rubber, cotton, tea, pepper, soybeans, cashews, sugar cane, peanuts, bananas; poultry; fish, seafood Exports: $39.92 billion f.o.b. (2006 est.) Exports - commodities: crude oil, marine products, rice, coffee, rubber, tea, garments, shoes Exports - partners: US 20.7%, Japan 12%, Australia 9.2%, China 5.6%, Germany 4.4% (2006) Imports: $39.16 billion f.o.b. (2006 est.) Imports - commodities: machinery and equipment, petroleum products, fertilizer, steel products, raw cotton, grain, cement, motorcycles Imports - partners: China 17.2%, Singapore 12.6%, Taiwan 11.2%, Japan 9.5%, South Korea 9.3%, Thailand 7.1%, Malaysia 4% (2006) Debt - external: $21.86 billion (2006 est.) Economic aid - recipient: $2.8 billion in credits and grants pledged by the 2006 Consultative Group meeting in Hanoi (2004) Currency: Vietnamese Dong (VND) Currency code: VND Exchange rates: dong per US dollar - 15,983 (2006), 15,746 (2005), (2004), 15,510 (2003), 15,280 (2002) Fiscal year: calendar year