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Tougher road awaits free-wheeling economy
Vietnam’s economy has enjoyed impressive growth momentum in 2010’s first quarter, but a tougher road is ahead.
According to the Ministry of Planning and Investment (MPI), the first quarter’s economic growth is estimated at 5.83 per cent. Of which, agriculture, forestry and fisheries production grew by 3.45 per cent, industry and construction by 5.65 per cent and services by 6.64 per cent.
The growth is higher than the 3.1 per cent rate achieved in 2009’s corresponding period, when the agriculture, forestry and fisheries sector only grew by 0.4 per cent, industry and construction by 1.5 per cent and services by 5.4 per cent.
“The outlook is bright for all sectors, meaning the economy has momentum for growth,” said MPI Deputy Minister Cao Viet Sinh.
An MPI report said favourable weather conditions and rising domestic market demand were important factors behind the first quarter’s growth. General Statistics Office (GSO) figures show that total retail turnover during January to March increased by 24.1 per cent against the same period last year.
Bui Ba Cuong, Head of the GSO’s National Account Statistics Department, said the retail growth proved rising consumers’ confidence of the economic prospect.
Furthermore, Sinh said the global economic recovery was a strong driving force, especially behind the disbursement of foreign direct investment. Over the past three months, foreign investors disbursed about $2.8 billion in Vietnam.
However, analysts have warned about more difficulties to face the economic growth ahead.
Le Dinh An, Director of the MPI’s National Centre for Socio-Economic Information and Forecasts, said the consumer price index (CPI) in March, which rose 0.75 per cent from February or 4.12 against last December, indicated the looming threat of high inflation.. “This is a dangerous level while the government is trying to keep inflation under 7 per cent this year,” said An.
He said lending interest rates had been pushed to the maximum level of 18 per cent per year, starting to cause difficulties to enterprises.
vietnamnet, Vietnam Investment Review
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