Viet­nam sees 6% growth, aided by build­ing boom

Kuwait Times - - BUSINESS -

Viet­nam’s econ­omy is fore­cast to grow 6.2 per­cent in 2016, helped by a man­u­fac­tur­ing and build­ing boom.

The Gen­eral Sta­tis­tics Of­fice said yes­ter­day that this year’s growth rate is be­low 2015’s rate of 6.7 per­cent but is still con­sid­ered a suc­cess given un­fa­vor­able global trends and a spate of nat­u­ral and en­vi­ron­men­tal dis­as­ters.

The south­ern Mekong Delta, the coun­try’s main rice grow­ing re­gion, ear­lier this year suf­fered the worst drought and in turn salt wa­ter in­tru­sions in nearly a cen­tury. Toxic chem­i­cals dumped into the sea in April by a steel com­plex in cen­tral Ha Tinh prov­ince, owned by a unit of Tai­wan’s For­mosa Plas­tics Group, dev­as­tated the re­gion’s fish­ing and tourism in­dus­tries.

Nat­u­ral dis­as­ters caused 18.3 tril­lion dong ($813 mil­lion) worth of dam­age, the sta­tis­tics of­fice said. Prime Min­is­ter Nguyen Xuan Phuc listed a trend to­ward pro­tec­tion­ism and the un­pre­dictable sit­u­a­tion in the South China Sea, where China and other na­tions hold con­flict­ing ter­ri­to­rial claims, as chal­lenges in a meet­ing with other gov­ern­ment of­fi­cials.

“This year, there was a big slow­down in min­ing and agri­cul­ture. The im­pact of nat­u­ral dis­as­ters on farming caused GDP to fall by 1 per­cent­age point,” the on­line state-run news­pa­per Dan Tri quoted Phuc as say­ing. He said the For­mosa Plas­tics dis­as­ter alone caused dam­age equal to 0.3 per­cent­age point of GDP.

Viet­nam’s gov­ern­ment rou­tinely is­sues an es­ti­mate for GDP growth be­fore the end of the year. A no­tice on the sta­tis­tics of­fice’s web­site said in­dus­trial out­put and con­struc­tion grew at a siz­zling 7.6 per­cent pace while ser­vices ex­panded at a 7 per­cent pace, ac­count­ing for a slightly larger share of the growth. Ex­ports rose 8.6 per­cent from the year be­fore to $175.9 bil­lion, while im­ports to­taled $173.3 bil­lion, it said.

The World Bank in a re­port ear­lier this month said Viet­nam’s econ­omy re­mains re­silient, thanks to ro­bust do­mes­tic de­mand and ex­port-ori­ented man­u­fac­tur­ing. It said Viet­nam’s medium-term out­look re­mains fa­vor­able, with GDP ex­pected to ex­pand by 6 per­cent this year. But the coun­try of 93 mil­lion has a ways to go in de­vel­op­ing strong mone­tary and fi­nan­cial poli­cies, leav­ing it vul­ner­a­ble to global down­turns.

Viet­nam’s man­u­fac­tur­ing sec­tor has gained in re­cent years from the coun­try’s par­tic­i­pa­tion in the Trans-Pa­cific Part­ner­ship, a trade pact led by the US. Pres­i­dent-elect Don­ald Trump’s op­po­si­tion to the plan poses a risk to the for­eign in­vest­ment that had been flood­ing into Viet­nam in hopes of gain­ing pref­er­en­tial ac­cess for ex­ports to the US and other TPP mar­kets such as Ja­pan.

“Viet­nam still has work to do to en­sure macroe­co­nomic health to weather po­ten­tial shocks,” Beatrice Tan­jangco of Ox­ford Eco­nom­ics said in a re­cent re­port.

“In­ter­na­tional trade has led Viet­nam to pros­per over the past few years, but it also made it more vul­ner­a­ble to global risks.”

HANOI: A shoeshine man walks past a Prada fash­ion store in down­town Hanoi.

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