Economists upbeat about 2018 outlook

14:29 | 30/03/2018 Economy- Society

(VEN) - Economists are predicting that Vietnam will achieve the 6.5- 6.7 percent gross domestic product (GDP) growth target for 2018 set by the National Assembly in light of the positive industrial production and import-export results in the first two months of this year.

economists upbeat about 2018 outlook

Growing industry and trade

According to the Ministry of Planning and Investment’s General Statistics Office of Vietnam (GSO), the index of industrial production (IIP) in the first two months of 2018 measured 15.2 percent higher than at the same time in 2017, when growth was only 2.4 percent. Of this, the manufacturing and processing industry increased 17.7 percent, power production and distribution grew 11.2 percent, and the mining industry 5.7 percent.

In the first two months, production of electronic components, computers and optical products took the lead among secondary industries, growing 38.3 percent compared to the first two months of 2017. Second in terms of growth was metal ore mining that increased 25.3 percent over the same time last year, when the growth was minus nine percent, and metal production (up 21.1 percent). The fastest growing industrial products in the first two months included televisions (up 73.9 percent), crude iron and steel (up 40.5 percent), powdered milk (up 23.7 percent), and liquefied petroleum gas or LPG (up 21.1 percent).

A GSO representative said the first two months’ IIPs of all 63 provinces and cities nationwide are higher than those in the same period last year, with the country’s major industrial production centers, including Bac Ninh Province, the city of Hai Phong, Quang Nam Province, and Vinh Phuc Province growing 45.1, 20.6, 16.9 and 14.1 percent, respectively. The number of people working in industrial enterprises nationwide in February 2018 increased 3.6 percent over the same time last year, with the industrial labor force in the city of Can Tho increasing 33.8 percent, 17.3 percent in Thai Nguyen Province, that in Bac Ninh Province soaring 15.1 percent, and that in Vinh Phuc Province up 8.3 percent.

Import and export activities in the first two months of this year also showed positive signals. Two-month foreign trade totaled US$33.62 billion, up 22.9 percent from the same time in 2017, of which US$9.66 billion was done by the domestic economic sector (up 25.7 percent) and US$23.96 billion by the foreign invested sector (up 21.8 percent). Major exports grew considerably compared to the first two months of 2017. Specifically, telephone and component exports yielded US$6.6 billion (up 41.7 percent), textile and garment exports reached US$4.3 billion (up 23.3 percent), electronic, computer and component exports hit US$4 billion (up 19.2 percent), and footwear exports were US$2.3 billion (up 11.9 percent).

Newly established businesses

A report by the Ministry of Planning and Investment showed that in the first two months, newly established enterprises increased both quantitatively and qualitatively to reach 18,703 units totaling VND197.3 trillion in registered capital, up 29.4 percent in quantity and 29.3 percent in value from the same time last year.

The ministry said 6,400 new wholesale and retail businesses were founded in the first two months of this year, up 31.9 percent and accounting for 34.5 percent of all sector enterprises. In the construction industry, 2,400 new enterprises were established (up 25 and accounting for 12.9 percent), and 2,300 businesses in the processing and manufacturing sectors (up 16 and accounting for 12.2 percent).

The number of newly established enterprises in different regions nationwide increased over the same time last year. The southeastern region is home to 8,100 newly founded enterprises totaling VND94.4 trillion in registered capital, up 33 percent in volume and 30.7 percent in value from the same time last year. The Red River Delta region is home to 5,400 newly established enterprises totalingVND54.5 trillion in registered capital, up 26.1 percent in quantity and 43 percent in value. Some 2,500 new enterprises were founded in the northern central and central coastal regions totaling VND23.8 trillion in registered capital, up 32.9 percent in quantity and 10.9 percent in value.

Economists view the large and increasing number of newly established businesses in 2016, 2017 and the first two months of 2018 as an important driving force for Vietnam’s economic growth in 2018 and the following years.

The Ministry of Planning and Investment’s National Center for Socioeconomic Information and Forecast (NCIF) said while there are many good signals for the country’s economic growth, difficulties related to climate change, the decline of the mining industry, and inefficient economic growth stimulus packages lie ahead to challenge Vietnam’s economic development. Ministries, sectors and localities are being urged to boost efforts to improve the business environment, remove difficulties for enterprises, and promote production and exports if they are to reach the growth targets.

The Ministry of Planning and Investment’s National Center for Socioeconomic Information and Forecast (NCIF) predicted that in 2018, Vietnam would likely reach an economic growth of 6.71 percent and maintain a low inflation rate of about 3.8 percent.

Nguyen Hoa