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6.81 GDP growth - A successful year of the Vietnam's economy

2/1/18

Vietnam’s GDP grew 6.81 per cent in 2017, a six-year high and surpassing the initial target of 6.7 per cent, driven by a recovery in agricultural production and a pickup in both industrial output and services, the General Statistics Office (GSO) said.

GDP grew 5.15 per cent in the first quarter, 6.28 per cent in the second, 7.46 per cent in the third, and 7.65 per cent in the fourth.

The figure beat almost all estimates, including the revised forecasts of the World Bank and the Asian Development Bank (ADB) of 6.7 per cent and HSBC’s 6.6 per cent. Only Standard Chartered Bank, with a revised forecast of 6.8 per cent, was accurate.

Growth came in at 2.07 per cent in agriculture, 5.14 per cent in forestry, 5.54 per cent in fisheries, 7.85 per cent in industry, 8.7 per cent in construction, and 7.44 per cent in services.

Among industries, processing and manufacturing grew 14.4 per cent, the highest rate in the last seven years, while mining shrank 7.1 per cent, the largest decline since 2011, primarily due to smaller crude oil and coal output, the GSO said, noting that crude oil output fell by over 1.6 million tons against 2016 and coal output by more than 180,000 tons.

Among services, growth of 8.36 per cent was reported in wholesale and retail, 8.98 per cent in accommodation and food, 8.14 per cent in finance, banking and insurance, the highest increase in the last seven years, and 4.07 per cent in real estate trading, the highest since 2011.

Vietnam’s nominal GDP in 2017 stood at nearly VND5,008 trillion ($221 billion), with GDP per capita at $2,385, or $170 higher than in 2016.

Agriculture, forestry and fisheries accounted for 15.34 per cent of GDP, industry and construction 33.34 per cent, and services 41.32 per cent. The respective proportions in 2016 were 16.32 per cent, 32.72 per cent, and 40.92 per cent.

Exports increased 21 per cent to a record $214 billion, with mobile phones and components making up about one-fifth.

The agro-forestry-fishery sector is expected to increase by 2.9%, contributing 0.4 percentage points to the 6.81% GDP growth level. The industrial and construction sector posted an 8% growth rate, contributing 2.77 percentage points whilst the service industry climbed by 7.44%, contributing 2.87 percentage points.

Lam said Vietnam’s socio-economic affairs 2017 took place in the context of steady recovery and growth of major economies such as China, the US, Japan, the Republic of Korea (RoK) and the European Union (EU).

The World Bank has forecast the global GDP would stand at 3%, while the International Monetary Fund (IMF) anticipated a growth of 3.6% this year, he noted.

Global trade activities also witnessed improvements. In September 2017, the World Trade Organisation (WTO) increased its forecast for global trade in 2017 to 3.6%, higher than the previous level of 2.4% and much higher than the growth of 1.3% in 2016.

They are active factors for domestic production since Vietnam has been integrating more extensively and intensively into the world’s economy, Lam explained.

He noted that inflation was curbed below the set target of the National Assembly. The country recorded high credit growth, abundant remittances and foreign direct investment (FDI), stable exchange rate, and increasing foreign exchange reserves.

According to the GSO, the economy in 2017 was worth VND5 quadrillion (equivalent to US$223 billion); the average GDP per capita is estimated at VND53.5 million (US$2,385), up US$170 compared to the 2016 rate. Goods and service exports increased by 16.74% while imports of goods and service rose by 17.5%.

Vietnam continued focusing on economic restructuring to increase competitiveness, improve the business environment, and promote start-up movements. The government also targets growth of 6.7 per cent in 2018./.

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