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Last updated: Friday, November 16, 2018

 

Vietnamese Economy Thrives in First Half of 2018

Posted: Tuesday, July 03, 2018

In the first six months of 2018 the Vietnamese economy grew at its fastest first-half pace since 2011, creating many opportunities for the country to maintain its strong growth and meet the whole-year target of 6.7 per cent.

But challenges remain, requiring the government, ministries, enterprises and people to make greater efforts to tackle the difficulties.

Bright spots
According to the General Statistics Office (GSO), Vietnam’s GDP in the first half of 2018 expanded by 7.08 per cent, of which the first quarter grew by 7.45 per cent and the second quarter by 6.79 per cent.

“This is the highest first-half growth rate since 2011, affirming the government’s prompt and effective efforts”, emphasised GSO Director, Nguyen Bich Lam.

A breakdown of the sectors shows that agriculture expanded by 3.93 per cent, its highest growth rate during the 2012-2018 period, and contributed 9.7 per cent to the overall growth, while industry and construction grew by 9.07 per cent and made a 48.9 per cent contribution.

Head of the GSO’s statistics department Pham Dinh Thuy stated that the brightest spot of the sector was the robust growth of manufacturing activity, surging by a seven-year high of 13.02 per cent.

In addition, the growth rate of services also posted its highest first-half performance in the last seven years, growing by 6.9 per cent and contributing 41.4 per cent to the overall growth.

Challenges
Besides the positive results, the Vietnamese economy is still facing numerous challenges.

According to the GSO Director, Vietnam’s growth no longer follows a pattern in which growth in a quarter is higher than that in the previous quarter. Growth in a quarter now outpaces the previous quarter as clearly seen in the first half of the year.

It is forecast that growth in the third and fourth quarter will be slower than the first and second due to the slowdown in a number of sectors.

He added that industry would slacken off as a result of reduced mining activity, while manufacturing will also hardly be able to sustain its current rapid pace in the final months. Unpredictable weather patterns and prices of agricultural commodities could also affect the agricultural sector.

Lam added that inflation remained under control but there are also risks that it might accelerate in the coming months.

Vietnam maintained a trade surplus from January to April but the trade balance returned to a deficit in May and June. Although the country ran a surplus in aggregate in the first six months of 2018, a deficit has been recorded with most of the countries with which Vietnam has signed free trade agreements.

Therefore in order to achieve the growth target for the whole year, ministries and local authorities should focus on measures to address the difficulties facing businesses and accelerate capital disbursement as directed by the government.

Furthermore, the monetary policy should be implemented in a cautious and flexible manner in tandem with the fiscal policy and other measures in order to stabilise the macro-economy, curb inflation and support growth.

It is also necessary to not adjust the prices of many goods and services at the same time and during the final months of the year to prevent their impacts on the consumer price index.

NDO








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