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GDP growth of 3.9 percent is good result: Economist
Vietnam is forecast to post gross domestic product growth of 3.9 percent in the first half of this year, compared to that of 6.5 percent in the same period last year, according to the Ministry of Planning and Investment.
Despite the slower pace, the GDP growth between January and June showed positive changes in business and production activities in the second quarter of this year, economist Nguyen Quang A told Thanh Nien Daily.
“In the context of global economic slowdown, 3.9-percent economic growth is a good result,” he said.
The economy had sputtered to its weakest first-quarter growth in a decade, only 3.1 percent, he said.
He was not optimistic about a quick economic recovery. “It will take Vietnam a long time to gain the full recovery of 9-percent GDP growth each year like it had some years ago, because of Vietnam’s heavy reliance on the world economy,” Quang A said.
The World Bank said June 23 that it expected Vietnam’s GDP growth to decrease to 3.5 percent this year, down from 6.2 percent last year and its March forecast of 5.5 percent.
Industrial production is set to increase 4.8 percent to VND324.2 trillion (US$19 billion) in the first six months of this year. However, the growth is much lower than that of 16.5 percent in the same period last year.
In June alone, industrial production went up by 8.2 percent. This is the fifth consecutive month of growth.
A representative from the Ministry of Industry and Trade said at a meeting held by the Ministry of Planning and Investment in Hanoi Wednesday that it was a good result considering how Vietnam’s export sector has suffered.
Dropping exports, imports
June is Vietnam’s third consecutive month with a trade deficit. In June alone, it’s estimated to be $1 billion, raising the total trade deficit in the first half of this year to over $2.1 billion.
Bui Ha, head of the General Economic Department under the Ministry of Planning and Investment, said at Wednesday’s meeting that plummeting prices and volumes of some key export items led to smaller total export turnovers in the first half.
Between January and June, the country earned $27.6 billion from shipments, down 10.1 percent over the same period last year. Prices of most exports decreased - crude oil went down 53 percent; rubber 44 percent; coffee 28.3 percent; rice 21.6 percent, and coal 7.5 percent.
Key export items, including textiles and garments, footwear, and seafood respectively saw decreases of 1.3 percent to over $4 billion, 8.7 percent to $2 billion, and 10.7 percent to $1.7 billion in the first six months.
Between January and June, the country spent $29.7 billion importing goods, down 34 percent over the corresponding period last year. Specifically, imports of steel and iron dropped 54.7 percent; timber and woodwork 40.3 percent; machines and equipment 19.2 percent, and petroleum products 3.6 percent.
CPI at 10.27 percent
Consumer price index (CPI) in the first six months was up 10.27 percent over the same period last year, according to the General Statistics Office.
Food prices have climbed by 14.81 percent, housing and construction materials by 2.91 percent and household appliances and utensils by 10.88 percent, the office said in a report released Wednesday.
Education services also cost 6.12 percent extra, while medical service increased by 8.31 percent.
Deputy head of the Central Institute of Economic Management Vo Tri Thanh said, “Inflation this year may increase 7-9 percent,” adding that effective control measures would be needed to combat it.
“We are at the end of a cycle of inflation slowing down,” Alain Cany, the Ho Chi Minh City-based chairman of the European Chamber of Commerce in Vietnam, told Bloomberg. “I would expect inflation to begin to speed up sometime in the third quarter, but hopefully within a level that’s acceptable for Vietnam, like the upper single-digits.”
The National Assembly earlier this month agreed to lower this year’s economic growth target to around 5 percent from the previous 6.5 percent, acknowledging the impacts of the global recession.
In the resolution that adjusted economic targets for the year, CPI will be kept to below 10 percent, export growth will be scaled down to 3 percent and the budget deficit will have a maximum limit of 7 percent of the GDP.
Ngan Anh
thanhnien
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