Vietnam growth slows
BELOW TARGET: Full-year expansion slightly lower than 2015’s but Q4 GDP of 6.68pc is the best for 2016
VIETNAM’s economy expanded an estimated 6.21 per cent this year, slightly behind last year and marking the first slowdown in four years, but a fourth-quarter surge to 6.68 per cent was the best for a year, keeping it among Asia’s fastest-growing economies.
Drops in agriculture and mining dragged full-year growth below last year’s 6.68 per cent and the government’s target of 6.3 to 6.5 per cent, said the General Statistics Office (GSO) yesterday.
“The gross domestic product (GDP) this year has not reached target or had any major breakthroughs but in general, the economy has had good growth except for the agriculture and mining sectors,” said GSO head Nguyen Bich Lam.
Last year, Vietnam’s economy had expanded at its fastest pace since 2007, having maintained growth momentum since 2012. The slower annual growth this year —the first deceleration since 2012 — left Vietnam ranked behind India, China and the Philippines.
GSO put the drop in pace down to adverse weather, a marine environmental disaster and an unfavourable global economy.
“The 6.21 growth this year is actually not too bad given the outside factors like weather and the international markets,” said Vietcombank Securities chief economist Tran Minh Hoang.
“Next year’s growth may improve slightly to 6.3 to 6.5 per cent as the oil market stabilises and public spending increases.”
Severe drought in the Central Highlands coffee growing region, salination in the paddy fields of the Mekong Delta, a cold spell in the north and floods in the central region also trimmed farm sector growth to 1.36 per cent this year.
Vietnam is the world’s secondlargest coffee producer after Brazil and ranks third behind India and Thailand in rice exports. Other key foreign exchange earners include mobile phones, textiles, footwear, fish and shrimp.
Vietnam’s mining sector fell four per cent this year on low prices of coal and crude oil, after an increase of 6.5 per cent last year, while an environmental disaster in April that was blamed on the local steel-making unit of a Taiwanese conglomerate devastated fisheries.
On the bright side, October-December GDP growth was the best this year as agriculture rebounded during the main rice harvest season, and there was solid growth in manufacturing, construction and services, which benefited from a record 10 million foreign visitors this year, GSO said.
Retail sales grew 9.1 per cent this year, while domestic credit growth quickened to 18 per cent as bank lending rose towards the year-end, with construction firms active borrowers.
Attracted by cheap labour and tax incentives inflows of foreign direct investment struck a record US$15.8 billion (RM70.8 billion) this year. Reuters