Vietnam Political and Economic Outlook 2011 and Beyond

For 2011 and beyond, Vietnam's political outlook will remain stable and its economic outlook forecasts to be strong for the foreseeable future according to the Economist Intelligence Unit's (EIU) country intelligence data and report.

In the midst of the world economic recession, Vietnam appears ready to continue as a highlight in terms of GDP growth in comparison to other economies around the world. Even though, the Communist Party of Vietnam will hold its 11th national congress in January 2011 and some significant changes are expected to take place, Vietnam's political outlook is expected to remain rock solid. In terms of their burgeoning economy, Vietnam's economic outlook is upbeat in comparison to other regions in the world with analysts forecasting annual real GDP growth to be an averag 6.7% for 2010-2011 and to accelerate to an average 7.2% from 2012-2014.

Vietnam is located along the Asia-Pacific Rim in Southeast Asia. It is bordered by Cambodia on the southwest, Laos on the northwest, China on th north, and the South China Sea on the east.

According to the EIU's country intelligence report, Vietnam's political outlook remains stable. The Communist Party of Vietnam (CPV) is expected to retain a firm grip on the affairs of the country.

In January 2011, Vietnam's ruling party CPV will hold its 11th congress with some jostling and shuffling forecasted to take place. According to the EIU, some top members of the Communist Party have shown signs of nervousness heading into the congress with some hardliners calling for strong arm tactics in dealing with dissent. This congress is expected to bring about changes in the CPV's internal makeup with a new generation of leaders set to take more prominent positions. One important note is that the party's general secretary, Nong Duc Manh and the party's president Nguyen Minh Triet are both expected to be replaced during the meeting. Country observers and analysts expect these changes to set the tone for the CPV's social and economic agenda for the upcoming five to ten years.

On the international scene, Vietnam continued to weather a disputes with China over territory rights in the South China Sea. The United States helped Vietnam in their dispute with China, but also showed disapproval of Vietnam's human rights record and violations. Vietnam has taken a neutral stance towards the two super powers in order to keep communication and economic trading lines open.

Vietnam's economic outlook for 2011 on through 2014 forecasts to be a highlight on the world economic stage. According to the Economist Intelligence Unit (EIU) country intelligence data, this burgeoning Southeast Asian economic growth is set to grow at a 6.7% average annual rate in terms of real GDP and an average of 7.2% from 2012 to 2014.

Even though the Vietnam economic outlook looks good for the foreseeable future, the EIU reported that the government gives mixed signals regarding direction of fiscal and monetary policy. The main problem facing Vietnam's economic policy makers is how to contain inflationary pressures while at the same time trying to pull off ambitious economic growth targets.

Even so the EIU forecasts that Asia will be the strongest region in terms of economic growth in 2010-2011 and foreign investors remain positive about Vietnam's long-term prospects. This will cause growth in manufacturing investment to be robust in the next two years. Moreover, the construction will find support in 2010-2011 by state investment in infrastrucure development projects. And, according to EIU country data intelligence estimations "Growth in the services sector, which functioned as the main engine of economic expansion in 2009, will also accelerate, with retailing and financial services making major contributions to growth."

One major factor that could affect Vietnam's economic outlook is whether China's economy will continue to expand at high rates. Of special concern is China's immediate needs for imports. If China's economy slows and they import less then Vietnam's economy could be adversely impacted in that China is Vietnam's third largest trading partner.

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