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The Socialist Republic of Vietnam

Economic UpdateJune 2008

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Table of Contents

1. Historical Macroeconomic Performance

2. Current Macroeconomic Situation

3. Policy Response to Address Macroeconomic Issues

4. Economic Outlook

Appendix

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1. Historical Macroeconomic Performance

[DRAFT]

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31.5%

22.4% 22.7% 21.5%

30.5%

20.6%

2003A 2004A 2005A 2006A 2007A 2008 YTD

Historical Macroeconomic Performance 2003 to 2007

Vietnam has experienced strong economic growth over the last five years

Source: Ministry of Planning and Investment

(Y-o-Y)

GDP Growth Export Growth

Committed FDI (US$ BN)

7.7%

8.4%8.2%

8.5%

7.2%

2003A 2004A 2005A 2006A 2007A

Source: Ministry of Finance Source: Ministry of Trade

4.5

6.8

12.0

20.3

3.1

2003A 2004A 2005A 2006A 2007A

! Average GDP growth of 7.5% per annum

! Strong export growth, >23% per annum

! Robust FDI commitment

! Effective poverty reduction policies

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Key Economic Indicators

1.7(2.4)(1.7)Budget deficit (% GDP)

7.120.3FDI committed (US$ billions)

21,51070,70558,921Import Volume (US$ million)

13,16065,82454,400Export Volume (US$ million)(1)

880 900832Per capita GDP at current prices (US$)

7.4%7.0%8.5%Real GDP growth (%)

16,40075,86570,902GDP at current prices (US$ millions)

1Q 2008Target 20082007

(1) Includes services

Source: Ministry of Finance

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2. Current Macroeconomic Situation

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Inflation is driven by strong credit growth, increased aggregate demand and higher pricesof food, imported commodities and oil

-3,000

-2,000

-1,000

0

Jan-

07 Feb Mar April May June Jul Aug Sept Oct Nov Dec

Jan-

08 Feb Mar Apr May

0%

10%

20%

Ja

n-07

Feb

Mar

April

May

June

July

Aug

Sept

Oct

Nov

Dec

Ja

n-08

Feb

Mar

Apr

May

Current Macroeconomic Situation 2007 to 2008 YTD

Source: Ministry of Trade, General Statistics Office

Inflation

Trade Deficit (US$ MM)

Source: General Statistics Office

(Y-o-Y)

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Imports Support Economic Development

Vietnams major import groups assist to promote economic development

! Rising proportion of capital goods imported will help boost future domestic productivity, but havebeen subject to rising prices

! Rise in imports in 2007 was due to large industrial machinery and equipment imports to support

national oil refining and exploration, hydro power, factory outfitting and infrastructureconstruction

! As a net importer of refined oil, inflation has been impacted. However, situation will bemitigated when Vietnams new oil refinery commences operations, expected in 2009

Source: Ministry of Trade Source: Ministry of Trade

Imports by Region Imports by Sector

(% by value of imports) (% by value of imports)

3.6%2.8%Motor Vehicles

1.6%1.6%Fertilizer

51.9%52.4%Others

5.3%6.4%Leather & Materials

8.2%7.2%Steel, Iron & Clinker

12.3%14.0%Petroleum

17.1%15.6%Machinery

2007A2006ASector

16.9%19.0%Rest of Asia

18.3%15.0%Others

8.6%9.1%South Korea

2.8%2.3%US

10.1%11.1%Japan

11.4%11.3%Taiwan

12.0%14.8%Singapore

20.0%17.4%China

2007A2006ASector

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3,305 2,753 3,087 3,088

17,540

6,821

8.3% 6.0% 5.8% 5.1%

24.7%

2003A 2004A 2005A 2006A 2007A 1Q 08E

Capital Account As % of GDP

2,150883

2,131

4,322

10,198

2,993

5.4%1.9%

4.0%7.1%

14.4%

2003A 2004A 2005A 2006A 2007A 1Q 08E

BOP As % of GDP

Balance of Payments Remains Robust

Source: State Bank of Vietnam

Flow of funds from outside of Vietnam has assisted to stabilise the BoP position

Source: State Bank of Vietnam

Current Account (US$ MN)

Balance of Payments (US$ MN)

Capital Account (US$ MN)

Source: State Bank of Vietnam

(1,931)(925) (497)

(6,992)

(5,287)

(164)

(4.9%) (2.0%) (0.9%) (0.3%) (9.9%)

2003A 2004A 2005A 2006A 2007A 1Q 08E

Current Account As % of GDP

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12.0

20.3

14.7

3.3

4.1

8.0

6.82005A

2006A

2007A

5M 2008

Realised

Committed

6.5%5.7%

4.9%6.0%

2005A 2006A 2007A Long Term

Forecast

(13,300)

(17,213)(19,210)

4,500

(1.6%) (1.8%) (1.7%)

2005A 2006A 2007A 1Q 2008E

Fiscal Balance As % of GDP

Other Economic Indicators Remain Strong

Source: Ministry of Finance Source: Ministry of Trade, General Statistics Office

FDI (US$ BN)

Fiscal Balance (VND BN, % GDP) Debt Service Ratio

Source: Ministry of Planning and Investment

FDI strength expected to continue throughout 2008 and foreign debt repayments are low