VIETNAM MACRO ECONOMICS

VietNamAssociationofSecuritiesBusiness– VASBHieu Nguyen – Head of Surveillance Committee

Tokyo, Nov 2017

2

VIETNAM MACRO: A SENSE OF GOLDILOCKS

8.48

6.18

5.32

6.78

5.89

5.035.42

5.986.68

6.21

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

3

VIETNAM MACRO: A SENSE OF GOLDILOCKS

5.15

6.177.46

7.31

Q1 Q2 Q3 Q4

GDP Growth Rate Quarterly

4

VIETNAM MACRO: A SENSE OF GOLDILOCKS

1.9

0.6

4.7

4 4

2014 2015 2016 2017F 2018F

CPI

21405

22540 22790 2290023400

20000

21000

22000

23000

24000

2014 2015 2016 2017F 2018F

FX RATE

5

VIETNAM MACRO: A SENSE OF GOLDILOCKS

- The government supports private sector

- Policy consistency:

• Monetary policy

• Faster NPL resolution.

• Push SOE reform.

• Encourage technology and innovation.

• Infrastructure development

• FDI increasing

• Positive growth in consumer spending

6

GROWTH DRIVERSFDI: Boost Economic Growth

Source: Customs, GSO, RongViet Research

- 5.0

10.0

15.0

20.0

25.0

2011

2012

2013

2014

2015

2016

9M20

17

FDI Commitments (USD bn)

Implemented capital Registered capital

Registered: USD 25,4 bil. Disbursed: USD 12,5 bil.

Korea 6.31 Japan

5.91Singapore

4.14

7

GROWTH DRIVERSFDI: Temporary Solution to Boost Economic Growth

Vietnam Openness

Exports

Investment

Labors

FDI

+21.4%

+15.0%

+7.5%

Domestic

+17.5%

+16.2%

1.6%

SOE

na

+6.1%

-3.6%

%YoY

Source: GSO, Customs, RongViet Research

Growth of Each Sectors in 9M2017

Trade/GDP (%) Export/GDP (%) Import/GDP (%)%Contribution of

FDI to Export%Contribution of FDI to Investment

%Contribution of FDI to GDP

%Contribution of FDI to Labors

2014 160.2 80.5 79.7 62.7 21.7 16.4 3.92015 169.9 83.9 86.0 68.3 23.3 17.0 4.22016 174.5 87.6 86.9 70.1 23.4 18.0 4.3

8

GROWTH DRIVERS

Source: GSO, Customs, RongViet Research* Decree No. 19 on solutions to improve the business environment and enhance Vietnam’s competitive capacity from 2016 to 2017 with a vision to 2020.

Private Sector

0%

10%

20%

30%

40%

2010 2011 2012 2013 2014 2015 2016 9M2017

Investment GrowthState capital Private capital

0

2

4

6

8

10

12

-

20000.0

40000.0

60000.0

80000.0

100000.0

120000.0

2012 2013 2014 2015 2016 9M2017

Business Activities

New established (LHS) Avg. registered capital (VND bn)

New Established 94.000 Shut down 58.000 Re - Established 21.100

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GROWTH DRIVERS

Vietnam Rubber GroupNatural Rubber

Q4/2017

Binh Son RefineryOil&Gas11/2017

PV PowerUtility

12/2017

PV Oil Oil&GasQ4/2017

VinaFood 2Agriculture

2017

ConstructionSong Da CorpConstruction

2017

Power Generation CorpUtility2017

Vietnam Mobile Telecom ServicesTelecom

2018

A holding company 04/2018

VinamilkConsumer Goods

10/2017

Hanoi Beer JSCConsumer Goods

Q4/2017

Saigon Beer JSCConsumer Goods

Q4/2017

SOE Reform:• Vietnam aims to equitize 137 additional SOEs in 2017-2020, Divestment from SOEs will get USD11 billion.

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Key Macro Indicators

Source: GSO, RongViet Research

2014 2015 2016 2017F 2018F

ECONOMIC GROWTH 5.98% 6.68% 6.21% 6.40% 6.60%

TRADE BALANCE (USD B) +1.5 -4.1 +1.5 -5.2 -7.6

EXPORT GROWTH 11.6% 8.1% 9.0% 20.0% 13.2%

IMPORT GROWTH 15.9% 12.0% 5.3% 24.0% 14.0%

INFLATION 1.9% 0.6% 4.7% 4.0% 4.0%

REFINANCING RATE 6.5% 6.5% 6.5% 6.25% 6.25%

M2 GROWTH 16.0% 14.5% 18.4% 16.0% 16.0%

CREDIT GROWTH 12.6% 17.3% 18.3% 20.0% 18.0%

BUDGET DEFICIT/GDP 4.7% 4.6% 3.9% 3.5% 3.5%

EXCHANGE RATE 21,405 22,540 22,790 22,900 23,400

11

Challenges

High Public Debt #65% GDP Low Productivity External impacts

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Key Macro Indicators

Source: GSO, RongViet Research

2014 2015 2016 2017F 2018F

ECONOMIC GROWTH 5.98% 6.68% 6.21% 6.40% 6.60%

TRADE BALANCE (USD B) +1.5 -4.1 +1.5 -5.2 -7.6

EXPORT GROWTH 11.6% 8.1% 9.0% 20.0% 13.2%

IMPORT GROWTH 15.9% 12.0% 5.3% 24.0% 14.0%

INFLATION 1.9% 0.6% 4.7% 4.0% 4.0%

REFINANCING RATE 6.5% 6.5% 6.5% 6.25% 6.25%

M2 GROWTH 16.0% 14.5% 18.4% 16.0% 16.0%

CREDIT GROWTH 12.6% 17.3% 18.3% 20.0% 18.0%

BUDGET DEFICIT/GDP 4.7% 4.6% 3.9% 3.5% 3.5%

EXCHANGE RATE 21,405 22,540 22,790 22,900 23,400

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