The impact of the world oil price on Vietnamese economy - Period : 2009-2014

Abstract

Oil has always been one of the most concerns since it has become the main material in production and life activity. When there is an oil price fluctuation, no matter up or down, the every economy is affected both positively and negatively. Vietnam is a developing country with the major oil industry, the effect from the world oil price variation is unavoidable. This paper is conducted to examine how Vietnamese economy is affected from the world, especially after the big oil price shock resulting from the crisis in 2008, and when the event has repeated recently since June 2014. The Ordinary Least Squares approach is applied to estimate the impact of the world oil price. The results suggest that the world oil price does have an inflationary effect on the economic growth in the 2009 – 2014 period; yet, that impact is not much considerable, as there are a number of economic factors which can affect the economy namely the interest rate and the GDP growth rate.