Vietnam Economy to Prosper in 2017

Most businesses are feeling optimistic about the economy in 2017 although TPP may not be approved. However, there are still many questions relating to Labour Law amendments, speed of high tech applications and how to continue to maintain consumer confidence.

This is the main content given in the "Supply Management 2017" forum, recently organised by Vietnam Supply Chain. Many businesses shared their comments on market information in 2017 to jointly design and reorganise the supply chain activities more responsively and efficiently.
 
Positive signs

According to the experts in the forum, the year of 2016 is a good year for Vietnam's economy. Among Asian countries, Vietnam ranks the 3rd only after India and China, in terms of GDP growth rate. The GDP growth rate of Vietnam in 2016 is forecast at 6.5 per cent.
 
In addition, there are more than 101,500 newly established enterprises, with a total registered capital of US$35.5 billion, up 17.1 per cent in the number of businesses and 48.1 per cent in business capital over the same period in 2015. The average capital of a newly registered business is US$345,700, up 26.5 per cent. The number of real estate projects increases. In 2016, the supply of industrial land is stable with some new projects in Ho Chi Minh  City and Binh Duong.
 
The Consumer Confidence Index (CCI) in 2016 is 90 points, which is higher than that in 2015 (85 points), illustrates that consumers are willing to spend more. In 2017, CCI is forecast to stabilize at 89 points. Consumers feel more confident in the growth rate of the economy, infrastructure development and improvement of living standards.
 
Regarding exports, enterprises and experts representing key export sectors of Vietnam, such as agricultural products, textiles, and electronics, also shared views on obstacles and advantages of Vietnam in the process of producing and exporting goods.
 
According to business representatives in areas of production of electricity and electronic goods, Vietnam is the centre of producing all goods exported to major markets of the world. Because there is almost no significant difference among products so that producers who have faster responses will win. This explains why businesses seriously focus on improving skilled human resources. Besides, many businesses also believed that although the labour productivity of Vietnam is still low, Vietnamese people's minds are open to innovation, which helps better facilitate the implementation of the projects in the factories.
 
High-tech application in logistics services

According to representatives of local and international logistics companies, the business situation is relatively favourable in 2016 and is likely to prosper in 2017. An important lesson for logistics businesses in the past year was the case of the Samsung Galaxy Note 7. High value phones like Samsung are usually transported by air to ensure faster supply to the market. However, due to a high fire risk, this phone is not allowed to board the plane, preventing supply chain of Samsung phones and causing problems for logistics service partners of Samsung.
 
Also, it is noticed that the development of artificial intelligence will impact significantly the logistics industry. This filed has marked a big milestone that many world leading enterprises are trying to test and deploy these positive results for the future logistics.
 
Currently, robots that can replace the humans to perform some activities like movement of goods and cargo tallying have been tested by many enterprises. Many people said that robots can be developed in many developed countries but those will be manufactured by the countries such as Vietnam.
 
In addition, technology has also made great influence on the success of the logistics industry when e-commerce has developed powerfully. Current e-commerce businesses have made progress in use of algorithms to analyse large volumes of data to predict what consumers will buy before they have demands for that product. Such purchases will be made fast through the network and the logistics services need to catch up with the pace of the technological development.
 
Most businesses are feeling optimistic about the economy in 2017. Although TPP may not be passed, Vietnam can expect other trade agreements such as the Asia-Europe trade agreement that is forecast to increase 2.27 per cent GDP growth of Vietnam. However, there are still many questions relating to Labour Law amendments, speed of high tech applications and how to continue to maintain consumer confidence.
 
Thu Ha / vcci