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VN struggles to reach annual GDP target

access_time Oct 19,2016 chat_bubble_outline 65 views

Vietnam has lowered its GDP target for this year to 6.3-6.5% from an initial 6.7%. The National Assembly's Economic Committee has admitted it would be difficult for the country to achieve 6.5% GDP growth for 2016.


VN struggles to reach annual GDP target
 

Vietnam has lowered its GDP target for this year to 6.3-6.5% from an initial 7.6%.



According to a report by the government, the country posted a GDP growth of 5.48% in the first quarter of this year; 5.78% in the second quarter and 6.4% in the third quarter. This meant the country's GDP growth in the January-September period was estimated at 5.93% against 6.63% during the same period last year.

The National Assembly's Economic Committee said that to ensure GDP growth of between 6.3% and 6.5%, fourth quarter GDP growth needs to be 7-7.7%. This was quite high and challenging, while there is an admission that the initial goal of 6.7% could be infeasible.

The government report said that that adverse weather conditions, along with environmental disasters have curbed the GDP growth.

The main drag on Vietnam's GDP growth continues to be the country’s agriculture sector. The country’s worst drought in three decades is crippling agriculture. As the world’s largest producer of robusta coffee and a major exporter of rice, a hit to agriculture would greatly impact the overall GDP.

The central region faced mass fish deaths caused by the Formosa pollution disaster, which caused big losses for local fish farmers. Meanwhile, mining continued its losing stretch due to low global commodity prices.

Based on the government's report, the National Assembly's Economic Committee pointed out the fall in the GDP growth was mainly attributed to the agriculture sector. Meanwhile, the sector remains weak and still depends greatly on natural factors.

The lower GDP will mean decreased export value which is expected to rise just 6-7% against an initial target of 10%.

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