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The Impact of Oil Price on the Growth, Inflation, Unemployment and Budget Deficit of Vietnam

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  • Nguyen Thi Ngoc Trang

    (School of Finance, University of Economics Ho Chi Minh City, Ho Chi Minh City, Vietnam,)

  • Tran Ngoc Tho

    (School of Finance, University of Economics Ho Chi Minh City, Ho Chi Minh City, Vietnam,)

  • Dinh Thi Thu Hong

    (School of Finance, University of Economics Ho Chi Minh City, Ho Chi Minh City, Vietnam)

Abstract

In oil exporting countries, especially OPEC members, oil price fluctuation has significant impacts on their economies. Herein, just a drop in the oil price causes directly many adverse effects, such as inflation, falls in economic growth, and increases in unemployment. However with a country which not only exports crude oil but also imports petroleum as Vietnam, it is not easy to determine falling or a rising oil prices is beneficial to the economy. Therefore, this paper aims to carry out a numerical analysis on the influences of oil prices on the macroeconomic variables of Vietnam, including inflation, growth rate, budget deficit and unemployment, during a period from 2000 to 2015. By using a vector auto regression model, it is realized that a rise in oil prices would lead to higher inflation and budget deficit in Vietnam while its impacts on the gross domestic product growth and unemployment are unclear.

Suggested Citation

  • Nguyen Thi Ngoc Trang & Tran Ngoc Tho & Dinh Thi Thu Hong, 2017. "The Impact of Oil Price on the Growth, Inflation, Unemployment and Budget Deficit of Vietnam," International Journal of Energy Economics and Policy, Econjournals, vol. 7(3), pages 42-49.
    • Handle: RePEc:eco:journ2:2017-03-06
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    References listed on IDEAS

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    2. Shahriyar Mukhtarov & Sannur Aliyev & Javid Zeynalov, 2020. "The Effects of Oil Prices on Macroeconomic Variables: Evidence from Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 72-80.
    3. Arvian Triantoro & Muhammad Zaheer Akhtar & Shiraz Khan & Khalid Zaman & Haroon ur Rashid Khan & Abdul Wahab Pathath & Muhamad Amar Mahmad & Kamil Sertoglu, 2023. "Riding the Waves of Fluctuating Oil Prices: Decoding the Impact on Economic Growth," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 34-50, March.
    4. Hao Tong, Kiet & Nguyen, Quyen Le Hoang Thuy To & Thi Mong Nguyen, Tuyen & Nguyen, Phong Thanh & Bich Vu, Ngoc, 2020. "Applying the Fuzzy Decision-Making Method for Program Evaluation and Management Policy of Vietnamese Higher Education," MPRA Paper 103448, University Library of Munich, Germany, revised 19 Jul 2020.
    5. Pham, Thai-Binh & Sala, Hector, 2019. "The macroeconomic effects of oil price and risk-premium shocks on Vietnam: Evidence from an over-identifying SVAR analysis," MPRA Paper 96873, University Library of Munich, Germany, revised 05 Jul 2019.
    6. Yu Hsing & Minh Q. Huynh, 2019. "Effects of Depreciation and Appreciation of the Vietnamese Dong on Aggregate Output," Business and Economic Research, Macrothink Institute, vol. 9(2), pages 45-56, June.
    7. Umar Tijjani Babuga & Niaz Ahmad Mohd Naseem, 2022. "Oil Price Change and Economic Growth: Evidence from Net Sub-Saharan Africa Oil Exporting Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 369-378, March.
    8. Sugra Humbatova, 2023. "The Impact of Oil Prices on State Budget Income and Expenses: Case of Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 189-212, January.
    9. Preeti Sharma & Avinash K. Shrivastava, 2024. "Economic Activities and Oil Price Shocks in Indian Outlook: Direction of Causality and Testing Cointegration," Global Business Review, International Management Institute, vol. 25(3), pages 771-790, June.
    10. Shahriyar Mukhtarov & Jeyhun Mammadov & Fariz Ahmadov, 2019. "The Impact of Oil Prices on Inflation: The Case of Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 9(4), pages 97-102.

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    More about this item

    Keywords

    Oil Price; Vietnam; Impulse Response; Variance Decomposition;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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