Vietnam optimistic about 6.7 percent annual economic growth

15:36 | 04/08/2018 Economy- Society

(VEN) - Based on gross domestic product (GDP) growth in the first half of the year as well as economic forecasts, Vietnam could achieve the 2018 economic growth target of 6.7 percent. However, the country should focus on seven key solutions to achieve higher growth.

vietnam optimistic about 67 percent annual economic growth
Strengthening tourism promotion to attract international tourists is necessary to achieve the growth target for the whole year

Highest growth since 2011

The Ministry of Planning and Investment announced the socioeconomic development figures for the first half of 2018. Accordingly, Vietnam’s economy expanded 7.08 percent, recording the highest first-half growth rate since 2011. Data show that agriculture expanded by 3.93 percent and contributed 9.7 percent to the overall growth, while industry and construction grew by 9.07 percent, making a 48.9 percent contribution. In addition, services posted a growth rate of 6.9 percent, contributing 41.4 percent to the overall growth.

“This is the highest first-half growth rate since 2011, affirming the government’s prompt and effective efforts,” said Nguyen Bich Lam, general director of the General Statistics Office of Vietnam.

Vietnam’s growth no longer follows a pattern in which each quarter’s growth tops the previous one. For example, first quarter growth registered 7.45 percent and the second quarter by 6.79 percent. Slower growth is forecast in the third and fourth quarters due to a slowdown in a number of sectors.

The brightest spot of industry and construction in the first half of the year was the robust growth of the manufacturing and processing sector, which surged by a seven-year high of 13.02 percent. However, the sector will be hard pressed to sustain its current rapid pace in the final months of 2018 for a number of reasons, including the trade and production activities of large foreign-invested enterprises such as Samsung and Formosa.

The mining sector posted a negative growth in the first half of the year, down 1.3 percent. Compared to a 7.8 percent drop in the first half of last year, the gap was narrowed significantly. However, this decline could affect the overall growth.

Seven key solutions

Besides the positive results, the Vietnamese economy is still facing numerous challenges caused by the influence of geopolitical issues and policy adjustment by major countries such as the US and China.

Therefore, in order to achieve the growth target for the whole year, ministries, departments and local authorities should focus on seven key solutions to address difficulties.

First, monetary policy should be implemented in a cautious and flexible manner in tandem with fiscal policy and other measures to ensure macroeconomic stability, curb inflation and support growth.

Also needed are financial discipline in managing the budget, promoting inspection and examining taxes, strictly controlling declaration and reimbursement of value added tax, and preventing trade fraud and smuggling.

Third, the state’s price management mechanism must be stable in order for policies to be effective, as inflation is under pressure owing to the volatility of global commodity prices, price hikes of goods managed by the government, and high growth of local consumption demand and securities markets.

Fourth, ministries, departments and local authorities need to enhance quality control of agricultural materials and seek measures to supervise food hygiene and safety and detect the use of banned substances in agriculture and fisheries.

Fifth, ministries, departments and local authorities are urged to continue creating a favorable environment for the development of the manufacturing and processing sector, especially deep processing, support industries and manufacturing of consumer goods.

Sixth, strengthening tourism promotion, adopting policies to attract international tourists and managing quality of accommodation and tourism services are also necessary.

Also among the solutions are effective implementation of social security policies and good execution of immediate emergency response activities to help people handle the risks of natural disasters.

Nguyen Bich Lam, general director of the General Statistics Office of Vietnam: Ministries, departments and local

authorities should support businesses in dealing with the disadvantages in exports to the US and the EU.

Chu Huynh