Last updated: Monday, April 24, 2017
Industrial Production Slows downPosted: Wednesday, April 12, 2017
The sharp drop of some key products resulted in the lowest industrial production growth since 2011, causing a considerable impact on the economy, said the General Statistics Office (GSO) at a press conference on economic performances in the first quarter of 2017.
GSO said the country’s gross domestic product (GDP) was estimated to expand 5.1 per cent year on year in the first quarter of 2017. Specifically, the agriculture, forestry and fishery sector grew 2.03 per cent in the first quarter and contributed just 0.24 per cent to the GDP growth. The industrial and construction sector climbed just 4.17 per cent and contributed 1.46 percentage points. The service sector posted a growth rate of 6.52 per cent and contributed 2.65 points to the overall growth.
Sharp-falling industrials included footwear (down 1.6 per cent), liquefied petroleum gas - LPG (3.9 per cent), coal (5.6 per cent), sugar (7.4 per cent), mobile phones (8.2 per cent), natural gas (8.9 per cent), and crude oil (14.9 per cent). The industrial sector picked up only 3.85 per cent from a year ago, the lowest level since 2011. The mining sector plunged 11.4 per cent year on year and the manufacturing sector expanded 8.3 per cent, the slowest pace since 2015.
According to statistics, the industry grew 9.16 per cent in 2011, 7.86 per cent in 2012, 4.76 per cent in 2013, 4.17 per cent in 2014, 9.27 per cent in 2015 and 6.92 per cent in 2016.
The agriculture, forestry and fishery sector expressively looked up 1.38 per cent, compared with a 2.69 per cent drop in the same period of last year.
Some sectors in the services sector contributed significantly to overall growth such as retail, accommodation, catering, finance, banking, insurance and real estate business.
In 2017, the National Assembly set a target GDP growth of 6.7 per cent, a challenge to the economy given outcomes in the first quarter. The US Federal Reserve (Fed) raised dollar interest rates, placing pressures on exchange rate, trade deficit and inflation. “Our country's economy will face more challenges than advantages, and the target is hardly achievable. Enterprises and authorities must focus to overcome difficulties to deliver plans,” said Mr Nguyen Bich Lam, Director General of the General Statistics Office.
Slowing manufacturing growth poses challenges to the Vietnamese economy. A HSBC report said that Vietnam’s economy is led by the manufacturing sector, noting that the manufacturing sector has driven Vietnam’s high economic growth in the past years. With a competitive labour force, Vietnam drew a record FDI value in 2016 and continued to gain global market shares of some key commodities such as apparel and electronics.
The country’s consumer price index (CPI) climbed 4.96 per cent year on year in the first quarter. March CPI rose 0.9 per cent from December 2016 and 4.65 per cent year on year.
Drug and medical services recorded the highest growth of 7.51 per cent in the CPI basket as 13 provinces and cities revised up health service prices, contributing 0.38 per cent to CPI growth. In addition, high CPI growth was pushed up by strong shopping demand during the Lunar New Year or Tet.
Remarking on Vietnam’s economic outlook in 2017, the National Centre for Socioeconomic Information and Forecast under the Ministry of Planning and Investment noted that all economic sectors will still face difficulties. Positive factors that can spur production and export in 2017 include the enforcement of trade agreements, a broader tariff reduction roadmap and increased export.