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Economy to recover in second quarter
Vietnam’s GDP growth rate is expected to be 3.5-3.8 percent in the second quarter of this year (or between 0.4-07 percent higher than the previous quarter) and 4.5-5 percent for the whole year, according to the national centre for socio-economic information and forecast.
The forecast is based on positive signs in the domestic and global economies. According to experts, the global economic crisis is slowing down while the domestic economy is showing signs of recovery, especially in industrial production, exports and services. In addition, the government’s packages to stimulate investment, production and spending have begun to pay off.
Experts say that Vietnam’s GDP growth rate in the first quarter, standing at 3.1 percent, is relatively high compared to that of regional countries, and the economy is keeping up momentum in April and the second quarter.
Major industrial products such as coal, processed seafood, garments and building materials regained their growth after a fall in March. The Ministry of Industry and Trade says that products which saw a drop in output in March are projected to recover in the coming months thanks to the government’s production and market stimulus packages.
Noteworthy is that the industrial production value in April dipped by just 0.28 percent compared to March while the March figure nose-dived 5 percent against February’s. Experts say this is a good sign that the industrial sector would bounce back in the following quarters.
Vietnam is considered a bright spot in the regional export picture in comparison with strong exporters such as Japan, China and Thailand. Despite failing to meet the target, sound export performance in February and March also fuelled export growth in April, especially following a halt to gold exports.
The Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade have proposed that the PM allow businesses to boost rice exports until the end of June thanks to soaring global prices and a bumper domestic harvest. So far this year businesses have signed contracts to ship 3.7 million tonnes abroad. Vietnam plans to export a total of 4.5-5 million tonnes this year.
Given the current difficulties caused by the global economic recession, garment businesses are taking great pains to expand the domestic market and seek overseas outlets. Since early this year, many businesses have signed contracts to export high-grade fibres to the Middle East, the Republic of Korea, Malaysia, the Philippines and China. In addition, Japan’s recent decision to increase imports from Asian countries, except for China, has opened a window of opportunity for Vietnam.
Public worries about deflation are no longer imminent as the consumer price index in April rose by 0.35 percent against March. Thanks to spending and investment stimulus packages, sales of essential consumer goods and material for production began to pick up. The prices of food, foodstuffs and fertilizer remained stable in the north and increased slightly in the south. These positive signs will help stimulate production, circulation and sales of commodities, especially after the implementation of second stimulus package, targeted at subsidising medium- and long-term interest rates, and the third package focusing on agriculture and rural development.
According to the national centre for socio-economic information and forecast, the agricultural sector is expected to grow at 2.1-2.5 percent in the second quarter and 3.4-3.7 percent for the whole year, while corresponding figures for the industrial sector will be 3.8-4.1 percent and 4.6-5.1 percent and for services at 4.0-4.2 percent and 4.9-5.5 percent.
Despite optimistic forecasts, the centre warns that the country should be well prepared for possible worst scenarios while introducing more bold measures to curb any further slowing of the economy.
The centre says that the government should update information regularly to give timely instructions, ensure stimulus packages are on the right track, accelerate the disbursement of capital for construction projects, tighten public spending, research possibilities to exports and markets and combat smuggling and trade fraud.
VietNamNet, VOV
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