Vietnam may miss 6.7% growth target for this year after weak Q3

HANOI: Weakness in mining and agriculture dragged on Vietnam’s third quarter growth and may see it miss the 6.7% growth target this year, a government economist said yesterday.

The mining sector contracted 6.8% in the JulySeptember quarter from a year ago, after falling 5.3% in the previous quarter, according to the latest government data.

Adverse weather, including drought in the coffee belt and salination in the Mekong Delta, have put the brakes on Vietnam’s rapid growth, biting into its industrial and agricultural production, its exports and imports.

“GDP growth in 2016 will be lower than target but how much lower will depend mainly on the mining sector,” said Ha Quang Tuyen, head of the General Statistics Office’s National Accounts Department.

Vietnam’s economy, widely seen as among the most resilient in a turbulent Asia, grew an annual 6.4% in the third quarter, the fastest pace since growth of 7.01% in the last quarter of 2015.

That was below the 6.87% in the same period last year, the General Statistics Office said in its monthly report.

“We hope there will be significant growth in the fourth quarter, may be equal to Q4 2015,” Tuyen told reporters.

Economists supported his assessment, predicting the exports and manufacturing led economy would pick up as the impacts of drought start to wane.

“With weather patterns now returning to normal, growth should rebound soon,” Gareth Leather of Capital Economics said in a research note. “Other sectors of the economy should continue to grow at a decent pace.”

The Asian Development Bank on Tuesday tipped the economy to rise in the second half of 2016, buoyed by more foreign direct investment (FDI), exports, domestic lending and a slight agriculture recovery.

The government is expecting US$11 billion in actual FDI in the first nine months, up 12.4% from a year ago, and on track for a record $15 billion for the full year.– Reuters