Viet­nam’s Q3 growth quick­ens solid ex­pan­sion in in­dus­try, ex­ports, ser­vices helps econ­omy

The Gulf Today - Business - - 4international -

HANOI: Viet­nam’s eco­nomic growth in July-septem­ber quick­ened to 7.46 per cent com­pared with a year ago in the strong­est third quar­ter growth since 2011, the statis­tics of­fice said on Fri­day, backed by solid ex­pan­sion in the in­dus­try and ser­vices sec­tors and ex­ports.

In Jan­uary-septem­ber, growth hit 6.41 per cent, the strong­est for the same pe­riod since 2015, the Gen­eral Statis­tics Of­fice said in a re­port, a pos­i­tive sig­nal for the South­east Asian na­tion as its pushes to hit its full-year growth tar­get of 6.7 per cent. The third quar­ter on-year growth ac­cel­er­ated from 6.28 per cent in the sec­ond quar­ter.

While most Asian economies are yet to re­port third quar­ter growth fig­ures, Viet­nam’s data sug­gests it could be one of the re­gion’s best per­form­ing economies in the pe­riod based on ex­pec­ta­tions for other coun­tries.

Reach­ing its full-year growth tar­get is im­por­tant for Viet­nam. It failed to hit the tar­get and slowed for the first time in four years in 2016, which was pro-in­vest­ment Prime Min­is­ter Nguyen Xuan Phuc’s first year in of­fice.

The gov­ern­ment has said Viet­nam needs to grow 7.4 per cent in the sec­ond half of 2017 to achieve the full-year goal, and has called for an in­crease in credit growth to 21 per cent this year de­spite con­cerns over bad loans, lower in­ter­est rates and an in­crease in in­vest­ment.

Cap­i­tal Eco­nom­ics Se­nior Asia Econ­o­mist Gareth Leather said de­spite the up­beat short-term out­look, which has been helped by firm ex­ports and ac­com­moda­tive mone­tary pol­icy, risks are build­ing.

“In par­tic­u­lar, we are in­creas­ingly con­cerned by the rapid in­crease in debt,” Leather said. “Credit booms on the scale that Viet­nam is ex­pe­ri­enc­ing are not sus­tain­able over the long term.”

The in­dus­try and con­struc­tion sec­tors grew 7.17 per cent an­nu­ally in the first nine months of this year, while the ser­vices sec­tor ex­panded 7.25 per cent in the same pe­riod and the agri­cul­ture area grew 2.78 per cent, the re­port said.

The in­dus­trial in­dex of pro­duc­tion in Septem­ber rose an es­ti­mated 13.2 per cent from the same month last year, the high­est growth since Fe­bru­ary, while trade sur­plus ex­tended to the third straight month in Septem­ber at $400 mil­lion, data by the statis­tics of­fice showed.

Viet­nam re­ceived an es­ti­mated $12.5 bil­lion in for­eign di­rect in­vest­ment (FDI) in the first nine months of this year, up 13.4 per cent from the same pe­riod in 2016. Viet­nam’s FDI in­flow hit a record high of $15.8 bil­lion last year.

De­vel­op­ing Asia is on track to grow faster this year and next, the Asian De­vel­op­ment Bank said, buoyed by a pick-up in world trade and China’s ex­pan­sion, but it flagged risks from tight­en­ing US mone­tary pol­icy.

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