The General Statistics Office (GSO) said, with the economic growth of 6.68 per cent in 2015, the highest in five years, the growth target of 6.7 per cent for 2016 is not too much to achieve. The room for raising Vietnam’s economic growth is still huge.
Creating new growth impetus
On December 26, GSO announced Vietnam’s socioeconomic data in 2015. GDP growth was seen as the most important indicator, rising 6.68 per cent over 2014, 0.48 per cent higher than the target of 6.2 per cent set by the National Assembly. This growth rate was highest since 2011. According to GSO, GDP per capita was estimated at VND45.7 million (US$2,109) in 2014, up 57 per cent over 2014.
“In 2015, agricultural growth was lowest in five years due to unfavourable weather conditions, hot weather, and prolonged drought. This sector will grow up in 2016 if these objective difficulties improve,” said Mr Ha Quang Tuyen, Director of National Accounts System Department under GSO. Some high-growing industries like processing, manufacturing, mining, electricity production and distribution and banking still have rooms for stronger development in 2016. For example, the processing and manufacturing industry expanded 14 per cent in 2011 but it climbed just more than 10 per cent in 2015. Specifically, in 2016, crude oil price is forecast to fall further, resulting in lower prices of gasoline and inputs of the economy as a whole. In addition, economic restructuring and institutional reform has made a certain progress but was still below expectations. Therefore, it is important to implement good policies to support and create new impetus for growth.
Overcoming difficulties and challenges
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According to the General Statistics Office, more than 71,000 companies were suspended or dissolved in 2015, in which more than 55,000 were closed.
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GSO admitted that Vietnam will have to overcome numerous difficulties and challenges to achieve the target GDP growth in 2016. GSO General Director Nguyen Bich Lam said that lower oil prices will reduce State budget revenues. Ministries and agencies concerned are expected to adjust prices of public services such as health and education; apply market pricing mechanism to State-controlled goods such as electricity and water to reduce subsidies; increase salaries; and minimise impacts of international monetary fluctuations on domestic exchange market. If we adjust exchange rate or otherwise raise interest rates on loans, corporate expenses will increase and corporate profitability will decrease as a result. These factors are not actually good for economic growth. Let alone, a lot of commodities will be levied zero tax next year and this may increase imports, resulting a higher demand for foreign currencies.
| Total State budget revenue was estimated at VND884.8 trillion in the year to December 15, or 97.1 per cent of the full-year estimation, while State budget expenditure was projected at VND1,064.5 trillion. Thus, the budget deficit was nearly VND180 trillion. Takings from crude oil plunged most, estimated to fall to only VND62.4 trillion, equal to just 67.1 per cent, due to a sharp decline in crude oil prices. Spending for development investment was forecast at VND162 trillion, equalling just 83.1 per cent. Administrative expenditures reached VND745 trillion, equal to 97.1 per cent. Repayments to debts and aid were valued VND148.3 trillion, equal to 98.9 per cent. |
After three consecutive years of trade surplus, Vietnam incurred a trade deficit of US$3.2 billion in 2015, partly because export growth slowed to just 8.1 per cent in 2015, below the target of 10 per cent, on falling export prices while import spending was projected to climb 12 per cent over the previous year to US$165.6 billion. Trade deficit in 2015 was entirely caused by the domestic business sector. The domestic business sector took a trade deficit of US$20.3 billion while the foreign business sector enjoyed a trade surplus of US$17.1 billion. In 2015, the deficit increased not only in trade with China, but also with Malaysia and Thailand. “To grasp advantages of free trade agreements, companies need to enhance their competitiveness and prepare for integration. Then, they will take gains or otherwise they will face enormous difficulty even in the domestic market,” he noted.
PV
Vietnamese
