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National GDP target moves out of reach
Vietnam’s gross domestic product target is under threat as the global financial crisis continues to bite.
According to the General Statistics Office (GSO), the economy grew only 3.1 per cent over the past three months. The increase is much lower than last year’s first quarter, when the economy grew at 7.4 per cent, and places the 6 per cent targeted for this year under threat.
Nguyen Ngoc Van, vice head of GSO Integrated Statistics Department, said a slowdown in industry, agriculture and exports drove the modest growth.
During the past three months, Vietnam’s industrial production value grew only 2.4 per cent compared to 9 per cent in last year’s first quarter. Meanwhile, the agriculture sector witnessed a reduction of 0.1 per cent due to bad harvests in the northern region.
“The narrowing export and domestic markets forced manufacturers to slow production over the past few months,” said Van. Export turnover increased 2.4 per cent during the last three months. Although the country enjoyed a trade surplus due to import reductions, the Ministry of Industry and Trade announced that the surplus mainly came from gold exports. Other products like rubber, crude oil, electric cable, wood, electricity products, coffee, coal and shoes have decreased against the same period last year.
“That means the global economic recession has had a tremendous impact on our economy,” said Cao Viet Sinh, vice minister of Planning and Investment.
Sinh said the global economy’s outlook was hard to forecast. “Because we have deeply integrated into the global economy we are suffering from the serious negative impacts of the crisis,” he said.
Sinh said, however, the 3.1 per cent GDP growth in the first quarter of the year was still a good result in the context of a global dark economy. But, he said it would be difficult to reach the growth targets set by National Assembly late last year. Many international organisations and financial institutes also predicted Vietnam’s economic growth would be from 4 to 5.5 per cent this year, lower than the 6.5 per cent targeted by Vietnam’s National Assembly.
The United Nations’ Economic and Social Commission for Asia and the Pacific (UN-ESCAP) last week also forecasted Vietnam’s economy would grow by around 4 per cent this year. The government’s plans to prevent the slowdown this year and avoid impacts of the crisis haven’t rung a chord with some, including Vu Dinh Anh, deputy director of the Ministry of Finance’s Institute for Market and Prices.
“The government has just focused on boosting production but not expanding markets. Thus, manufacturers face difficulties in selling their products. Certainly, they have slowed production,” said Anh. He said the reduction of the consumer price index (CPI) was a sign of the reduction in demand. “If demand was boosted the CPI would increase,” he said.
VietNamNet/VIR
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