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Government adjusts 2016 growth target

access_time Oct 04,2016 chat_bubble_outline 66 views

Government officials have said that the economy may miss the GDP growth target of 6.7 per cent this year following soft numbers in the first nine months.


Government adjusts 2016 growth target


“It is estimated that GDP growth for 2016 will be from 6.3-6.5 per cent but most likely it will be 6.3 per cent,” Deputy Minister of Planning and Investment Dao Quang Thu told the government meeting on September 30.

Vietnam’s economic growth over the first nine months of 2016 was estimated at 5.93 per cent year-on-year, the General Statistic Office (GSO) revealed on September 29.

Agriculture, forestry and fisheries grew 0.65 percent year-on-year, its lowest growth in the last six years, and contributed 0.11 percentage points to the GDP increase, according to the GSO.

The industry and construction sector grew 7.5 per cent year-on-year, contributing 2.52 percentage points, while the services sector rose 6.66 percent year-on-year, contributing 2.55 percentage points.


Main indicators, first nine months of 2016, year-on-year (%)


GDP growth


+5.93


Agriculture, forestry and fisheries growth


+0.7


IIP


+7.4


Retail sales of goods and services


+9.5


Export turnover


+6.7


Import turnover


+1.3


Foreign visitors


+25.7


Disbursed investment capital from State budget


+13.1


CPI


+2.07


Core inflation


+1.81


Source: GSO


Though strongly affected by contractions in the agriculture and mining sectors in the first half of the year, the GSO puts GDP growth in 2016’s third quarter at an impressive 6.4 per cent, higher than the 5.48 per cent and 5.78 per cent recorded in the first and second quarters, respectively.

GDP growth is increasing quarter-by-quarter, with the figure for the second quarter being 0.3 per cent higher than the figure for the first quarter and the third quarter being 0.62 per cent higher than in the second quarter.

According to Mr. Ha Quang Tuyen, Head of the System of National Accounts Department under the GSO, there were three main factors influencing GDP growth in the third quarter.

First, the agriculture, forestry, and fisheries sector has warmed up after falling for six consecutive months. Second, exports increased slightly, by 1.3 per cent, after falling 0.5 per cent in the first half. Third, the number of newly-registered businesses and businesses returning after suspending operations increased significantly. “This shows that businesses have found new opportunities to develop,” Mr. Tuyen said.

The Asian Development Outlook Update (ADOU) 2016 was released on September 27 by the Asian Development Bank (ADB), with a downward revision to Vietnam’s economic growth, to 6.0 per cent in 2016 and 6.3 per cent in 2017, as a result of contractions in the agriculture and mining sectors in the first half of this year.

“Drought in the Mekong Delta and central highlands regions and low global commodity prices eased economic growth in the first half of the year, but other sectors have grown strongly,” said Mr. Eric Sidgwick, ADB Country Director for Vietnam.

Mr. Tuyen believes that 2016’s economic growth will not reach the 6.7 per cent target set by the National Assembly (NA) nor the 6.0 per cent forecast by ADB.

The figure, he said, will depend on crude oil output in the final three months of the year. Average output is 1.3 million tons per month. If the fourth quarter’s crude oil output continues at this rate, “the extraction of crude oil will lift up annual growth,” Mr. Tuyen believes.

VN Economic Times

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