Falling global oil prices will have a double-edged impact on Vietnam’s economy – simultaneously lowering revenues generated by crude oil exports as well as the costs of importing petroleum products.

Morgan Stanley predicted that Brent would average $70 a barrel in 2015, down $28 from a previous forecast, and $88 a barrel in 2016.

The investment bank also said that oil prices could fall as low as $43 a barrel, next year.

Vietnam’s export revenues are expected to plummet, dealing a strong blow to the state budget, said economist Le Dang Doanh. Earnings from crude oil shipments now account for 10 per cent of the country’s state budget. The reduction will also cut Vietnam’s spending on imported petroleum products and help curb inflation. Relevant agencies should study whether Vietnam will enjoy a net benefit or loss from the drop in crude prices, so that it can make budgetary adjustments, he said.

Chairman of the Government Office Nguyen Van Nen said the state budget collection plan for next year was calculated based on an oil price of $100 per barrel. Every $1 drop in the price per barrel has translated to a VND 1 trillion ($47.62 million) loss for the state budget.

“If oil prices plummet below $80 a barrel, budget collection will fall by around VND20 trillion,” Nen said.

To minimise losses caused by the price reduction, the country plans to focus on fields with low extraction costs and temporarily cease tapping high-cost ones, he said. Vietnam is expected to produce more than 17 million tons of crude oil this year (341,000 barrels per day), beating its annual target by at least five per cent, Reuters quoted state oil and gas group Petrovietnam as saying.