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

Authors

  • Nguyen Thi Ngoc Trang
  • Tran Ngoc Tho
  • Dinh Thi Thu Hong

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 (VAR) 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 GDP growth and unemployment are unclear.

Keywords: oil price, Vietnam, impulse response, variance decomposition

JEL Classifications: E31, O47, Q4

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Published

2017-07-18

How to Cite

Trang, N. T. N., Tho, T. N., & Hong, D. T. T. (2017). The Impact of Oil Price on the Growth, Inflation, Unemployment and Budget Deficit of Vietnam. International Journal of Energy Economics and Policy, 7(3), 42–49. Retrieved from https://econjournals.com/index.php/ijeep/article/view/4521

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