Vietnam economy to slow down unless crude oil recovers: forecast

Experts at the Ministry of Planning and Investment's Center for Economic and Social Information and Forecast made the prediction as oil prices have been on a downward slope since the beginning of this year, falling 33 percent for the year to around US$35 this week.

Weak oil would also put the country, whose inflation rate is estimated to be less than 2 percent this year, at risk of deflation, they said.

But the negative impacts would ease starting in 2017, they estimated.

Vietnam is a crude oil exporter, and its exports are expected to see a slight increase next year as its major buyers are expected to do better.

Its import bill, on the other hand, will decline as the prices of imported fuel products go down, according to the forecast.

In a recent interview with Vietnam Television, Deputy Minister of Finance Do Hoang Anh Tuan said while low crude prices would hit the government’s revenues hard, they would also make imported fuels cheap.

He estimated Vietnam's fuel import bill to reduce by US$2-2.1 billion next year if crude prices remain at current levels.

The center's experts also predicted the outlook for Vietnam's economy if crude prices go up to US$40 and US$50, saying the growth rate would be cut by 0.85 and 0.42 percentage points respectively.

The government needs to keep a close watch on crude prices to tweak policies accordingly, including monetary and pricing policies, to give a boost to the economy when needed, they said.