New investment in production and improved European and American import demands for goods are expected to increase Vietnam’s exports in 2014, the Vietnam Economic News reported on January 14.

The newspaper quoted financial experts as predicting that Vietnam will become one of countries benefiting most from improved demand in western markets.

Vietnam is an export-based economy as export value makes a great contribution to the country’s gross domestic product (GDP). Although the global market’s demand was changing and prices decreased, Vietnam reached an export growth of 15.4 percent in 2013. Textile and garment exports and foreign direct investment (FDI) in the electronics industry increased. With a 9.9 percent growth in invested FDI capital and a considerable increase in registered FDI capital, exports are expected to thrive in 2014.

Vietnam recorded a slight trade surplus in 2012 and a 900 million USD trade surplus in 2013. This helped the country improve its macroeconomic stability.

Production remained a highlight of the Vietnamese economy. The Purchasing Managers Index (PMI) was at 51.8 in December 2013, up 1.5 from the previous month. This index showed that the production sector grew strongly in the fourth quarter of 2013. The GDP increased six percent in this quarter. The PMI's sub-index measuring new business orders increased from 48.8 in November 2013 to 52.5 in December 2013.

Increases in the PMI's sub-index measuring new business orders and decreases in the inventory index augur a growth in production output in the coming months. Increases in goods purchases mean increases in demand. GDP in Europe and America is expected to increase in 2014, which is expected to increase the demand for Vietnamese goods including textiles, garments and electronics. The increased employment sub-index is the most positive signal. This reflects the competitiveness of labour intensive industries that attracted a large amount of FDI in 2013.

According to the newspaper, although the domestic demand remained low due to bad debts, the economy ran relatively well thanks to the service sector’s stability and the production’s export growth-based development. Service demands in Vietnam were relatively stable because they were mainly for essential services. The service sector made a 43.9 percent contribution to the country’s GDP in 2013, up 6.6 percent from 2012.

Highlights in 2014 will be exporters as they are expected to grow strongly in the New Year with improved global conditions and under-negotiation trade agreements, the paper concluded.-VNA