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Economy Shows Signs of Stability

Customers take out loans at preferential interest rates at HD Bank in Hoan Kiem District, Hanoi.

HANOI — Vietnam's economy is showing signs of stable development in the face of difficulties caused by the global economic crisis, Mr.Do Thu, Director of the Ministry of Planning and Investment's General Statistics Office said.

Thuc made his comments at a press conference yesterday in Ha Noi on socio-economic situation in the first half of this year. He said the country's Gross Domestic Products (GDP) grew 4.38 percent in the first 06 months against the same period last year. "Although the growth was lower than that targeted for the whole year at 6 to 6.5 per cent, the GDP was recognised as being in an upward trend. GDP growth in the second quarter was 4.66 percent, whereas it was merely 4 percent in the first one," Thuc said.

The growth stemmed from a better performance of Industrial and Construction sectors which had certain impacts on other sectors. Manufacturing and Construction areas were recognised a solid growth at 4.52 percent in the second quarter, compared to 2.94 percent in the first. In the first half, services reflected the highest growth at 5.57 percent, next was Manufacturing and Construction, which reached to 3.81 percent; the Agro-Forestry and Seafood sector went up only 2.81 percent. Meanwhile, the Consumer Price Index (CPI) growth had been curbed by gradually declining growth in the first half. CPI increased 1 percent and 1.37 percent in January and February. Then the growth rate inched up 0.16 percent, 0.05 percent and 0.18 percent in March, April and May, respectively. The index showed a fall in growth of 0.26 percent in June, the first period of negative growth in 38 months of a rising index.The State budget increased 5.1 percent, as a result of over-expenditure which was held at 4.8 percent, lower than the target of 5 percent, the Ministry reported.

Exports skyrocketed by 22.2 percent, whereas imports maintained a lower growth at 6.9 percent in the first half, making trade deficit slow down nine times lower than in past years. According to the ministry, the total investment capital of the whole socio-economy reached VND431.7 trillion (US$20.56 billion) in the first half, a year-on-year increase of 10.1 percent and equal to about 34 percent of the total GDP. Of this, State-owned capital was VND158.7 trillion ($7.56 billion), accounting for 36.8 percent, rising 6.8 percent against the same period last year. The non-State sector hit VND163 trillion ($7.76 billion), making up the highest proportion at 37.7 percent, increasing 18.1 percent. The remainder was contributed by the FDI sector with a growth rate of 4.2 percent. However, Thuc said: "Vietnam faces lower demand and it is a hindrance and a challenge for stable economic development. "It requires appropriate policies on Finance, Currency, Interest Rates, Total Outstanding Loans and Public Investment among others. The policies must be governed timely under strict control in order to ensure effective economic development and inflation is reined in. "Poor demand was shown by high goods inventories, Thuc said. The inventory index of industrial products was 26 percent in June, whereas the indices represented growth rates ranging from 26.9 per cent to 34 per cent in the first 05 months. A number of enterprises that stopped operations in the first half reached to the number of 26 324, up to 5.4 percent from the same period last year, whereas figures of newly established companies slumped 12.5 percent year-on-year, he said. The unemployment rate was 2.22 percent, slightly higher than the previous corresponding time.

With current impediments and poor demand, it would not be easy for economic growth to surpass 6 percent for the whole year, Thuc stated.

(Source: VNS)

 

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