Low Oil Prices can boost Vietnam's Economic Growth

by **Ponee** Thu Jan 29, 2015 4:05 pm

NDO – Oil prices as low as US$40 a barrel could add 0.43 percentage points to Vietnam’s economic growth in 2015, according to Minister of Planning and Investment Bui Quang Vinh.

In two different scenarios, if oil prices stand at US$50 and US$60, Vietnam’s growth rate could be increased by 0.31 and 0.27 percentage point respectively, the minister added.
Minister Vinh said lower oil prices will hurt Vietnam’s oil production and Government revenue but gains from lower prices are higher than losses.

He stated that since Vietnam’s imports of refined oil products outstrip its crude exports, the economy can benefit from lower input and transport costs.

He elaborated that revenue from oil exports can fall by 4-5% in the short term but lower fuel prices will stimulate consumption and economic growth in the medium and long term.
Minister of Finance Dinh Tien Dung shared Minister Vinh’s view, citing some analysis that sharp falls in oil prices will give way to a new period of global economic boom beneficial to the Vietnamese economy.

Earlier, Prime Minister Nguyen Tan Dung said that the price regulation must harmonise with the interests of the State, enterprises and consumers.
He urged the Ministry of Finance to work with the Ministry of Transport and relevant ministries to work out measures to bring down transport costs in line with reductions in fuel prices.

The prime minister requested that transport costs be slashed before the Lunar New Year, which falls in mid-February.