Vietnam Posts Economic Growth in First Half of 2005 far Below Target

Vietnam Posts Economic Growth in First Half of 2005 far Below Target

Vietnam’s gross domestic product (GDP) is estimated to grow 7.59 per cent in the first six months of this year, much lower than the target of 8.5 per cent set for the whole year, said Deputy Minister of Planning and Investment Nguyen Ngoc Phuc.

He told a meeting between ministries, branches, localities and State-owned corporations in Hanoi on June 24 that to reach the yearly target set by the National Assembly, the country must strive to register an economic growth rate of over 9 per cent in the six remaining months.

According to the conference, the low GDP growth rate so far this year is attributable to the shortage of electricity for production, unexpected fluctuation of prices of fuel and materials, and commercial barriers in key foreign markets.

Local industrial production, for example, is forecasted to decline by 4.3 per cent on-month in June while the six-month output value will increase slightly by only 1.5 per cent on-year.

The export of many staples has also slowed down due to fiercer competition on the global market. Six-month garment and textile exports are predicted to record the lowest increase rate since 2000, at 12.6 per cent on-year, admitted head of the Planning Department under the Vietnam Garment and Textile Corporation (Vinatex).

Another cause is the lack of unity between documents directing the implementation of investment projects and infrastructure construction, ministry officials said, adding that this has delayed the progress of many projects and disbursements.

In the reviewed period, industrial production is expected to grow 15.6 per cent on-year, while export value will be up 17.4 per cent and total domestic trade revenues up 18.5 per cent against the same period last year.

The MPI earlier this month predicted the GDP growth rate could surpass 8 per cent this year compared to 7.69 per cent achieved in 2004. It also set a high annual rate of 8-8.5 per cent for the next five years.

International agencies such as the World Bank, the International Monetary Fund and UN agencies put Vietnam’s GDP growth rate at between 7-8 per cent annually for the 2005-2006 period.

VNA