Vietnam: Government reviews Q1 & 4M economic development

• May 05, 2017

Credit growth in the first fourth months of the year rose to a six-year high of 4.89 per cent against 3 per cent a year ago, Prime Minister Nguyen Xuan Phuc told the monthly government meeting on May 4.

Vietnam’s economic growth slowed to an estimated annual rate of 5.1 per cent in the first quarter, the slowest in three years, with the industrial sector suffering from its smallest expansion since 2011.

Against this backdrop, the PM said things improved in April, with the macro-economic situation stabilizing.

The month’s consumer price index (CPI) remained unchanged, even after a second hike in healthcare costs in 14 cities and provinces nationwide. Key economic sectors continued to recover, with the national index of industrial production (IIP) rising 7.4 per cent year-on-year, higher than the 4.2 per cent during the first quarter.

Exports from January to April continued to surge, by 15.4 per cent year-on-year, with the highest growth in manufacturing and processing and agriculture.

Total newly-registered foreign direct investment (FDI) capital, stake purchases and supplemental capital in the four months rose 40.5 per cent year-on-year to $10.6 billion.

State budget revenue has been relatively high, up 17.8 per cent year-on-year and equal to 32.7 per cent of the annual plan. Nearly 40,000 new businesses have been registered this year as at April 30, with a total of VND825 trillion ($36.26 billion) in both new and supplemental capital.

But the socioeconomic situation continues to face a host of challenges. Certain sectors have continually slumped, especially industrial, mining and quarrying, and food production. Elsewhere in the economy, a number of sectors remain unstable, with State management exhibiting inadequacies. Prices of many agricultural products are extremely low, including pork, to the detriment of farmers.

During the first fourth-month period, the IIP rose by a modest 5.1 per cent year-on-year, much lower than its growth rate a year ago. The index in the mining sector tumbled 5.6 per cent.

The allocation and disbursement of public investment remained slow, while the allocation of capital for construction during the four months was equal to only 19 per cent of the annual plan.

Exports of two products where Vietnam holds an advantage, rice and pepper, fell 8.1 per cent and 16 per cent year-on-year, respectively. Conversely, imports of products that could have been produced domestically rose significantly, including steel, petroleum, chemicals and livestock feed. The trade deficit remained high, at $2.7 billion as at end-April.

The PM affirmed that restructuring, equitization, and divestment at State-owned enterprises in recent months have been sluggish.

Vietnam has one of the world’s fastest-growing economies, expanding at around 6 per cent annually from 2011-2015 after jumping 7 per cent annually in the previous five years.

Source: https://www.talkvietnam.com/2017/05/government-reviews-q1-4m-economic-development/