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Economic News

Last updated: Friday, October 20, 2017

 

Vietnam’s GDP Growth Accelerates on Strong FDI, Exports

Posted: Monday, October 02, 2017

A cashew processing line in Vietnam. Photo: VTK
A cashew processing line in Vietnam. Photo: VTK



Vietnam’s economic growth in the first nine months of this year accelerated from a year earlier, supported by robust foreign direct investment inflows and a strong growth in exports.


Gross domestic product in the January-September period grew 6.41% year on year, faster than an expansion of 5.99% a year earlier, according to data from the General Statistics Office (GSO).

“The improvement of global trade has left a positive impact on domestic production,” the GSO said, noting the recovery of large economies, including China, the U.S., Japan, South Korea and the EU, which are Vietnam’s key export markets.

The services sector grew 7.25% in the period, followed by the manufacturing and construction sector with a rise of 7.17% and the agricultural sector with an increase of 2.78%, the GSO said.

On a quarterly basis, growth in the third quarter ending September 30 accelerated to 7.46%, compared with a growth of 6.28% in the second quarter and 5.15% in the first quarter, the GSO said.

Vietnam is expected to record a trade surplus of $400 million in September, the GSO said. Exports in September likely rose 23.6% from a year earlier to $19 billion, while imports were up 27.3% at $18.6 billion.

For the January-September period, exports are estimated to have risen 19.8% from a year earlier to $154.0 billion, while imports likely grew 23.1% to $154.5 billion, resulting in a trade deficit of $500 million.

Consumer price index in September rose 0.59% from August and was up 3.4% from a year earlier, according to the GSO. Average CPI in the nine-month period rose 3.79% from the same period last year. Vietnam aims to keep inflation below 5% for this year.

Late last month, the Ministry of Industry and Trade said the disbursement of foreign direct investment in Vietnam in the first nine months of this year likely 13.4% year on year to $12.5 billion. FDI pledges for the period rose 34.3% to $25.48 billion. Disbursement refers to the actual amount of money spent, while FDI pledges indicate the size of future disbursements.

The GSO said the government agencies, provinces and the business community will need to continue to stick to the government’s socio-economic development measures for the country to meet this year’s economic targets, including a GDP growth of 6.7%. The Asian Development Bank last month revised down Vietnam’s GDP growth forecast for this year to 6.3% from 6.5%, citing a contraction in the mining and oil output in the first half of the year.

The GSO said Vietnam will need to seek to lower banks’ lending interest rates to boost this year’s credit growth to 21%, adding that new loans will have to be funneled to prioritized areas, including agriculture, export-oriented manufacturing, supporting industries, hi-tech projects and small- and medium-sized enterprises.

It said the country will also need to boost trade and tourism promotion activities and speed up the disbursement of funds from the state budget on infrastructure projects during the remaining months of the year.

VTK








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