09:30 | 05/06/2015 Economy- Society
Vietnam’s domestic consumer spending has risen in the first five months of 2015, indicating a boost for the country’s economic growth, according to the Dau Tu (Investment) newspaper.
After enjoying rapid growth from 2001 to 2010, total consumer spending (excluding spiraling prices) snapped back in the past four years with an annual average growth rate half of what was seen in the previous period.
The consumer spending slowdown brought the Consumer Price Index (CPI) growth between 2012-2014 to 6.63% a year compared to the annual 9.35% recorded in 2001-2011. The national Gross Domestic Product (GDP) growth also tapered off to 5.72% a year from 6.82% in the respective periods.
However, increases in domestic consumption, which is reflected in the total retail sales of goods and services, in the first five months of this year has surpassed GDP growth, a crucial contribution to the country’s economic recovery.
In the past five months, the private sector accounted for 85.7% of the total retail sales of goods and services, while the public sector made up 11%.
Despite representing just 3.3%, the foreign-invested sector recorded the highest growth (9.7%) and the trend is expected to continue as Vietnam enters several new free trade agreements (FTA) and joins the ASEAN Economic Community (AEC) by late 2015.
Retail of goods accounted for a majority 76.4% of the total figure with a soaring pace of 10.2%, and revenues from services also rose with an exception of tourism, as the number of international visitors dropped 12.6% from the same period last year.
Although Vietnam’s consumer spending is rebounding remarkably, total domestic demand remains weak.
The paper said the country should intensify investment and exports as well as increase per capita income to increase overall domestic demand and spending, contributing to the recovery of the country’s economy./.
Source VOV News