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Vietnam Today

GDP bounces back in Q2

Released at: 18:07, 29/06/2017

GDP bounces back in Q2

Illustrative image (Source: infonet.vn)

Growth of 6.17% puts annual target back on track.

by Duy Anh

Vietnam’s economy bounced back in the second quarter of the year, posting growth of 6.17 per cent, according to official figures from the General Statistics Office (GSO) and driven by gains in the industrial and services sectors, though mining dragged growth down slightly.

Industry grew 5.33 per cent in the quarter, down on the 9.66 per cent and 7.01 per cent increases in the same period of 2015 and 2016, due to an 8.2 per cent decline in the mining sector.

Vietnam’s economy grew at 5.1 per cent in the first quarter, less than anticipated, after Samsung Electronics, a driver of growth, cut production, underscoring the country’s reliance on exports. This was also the slowest growth since the first quarter of 2014.

In a May interview with foreign media, Prime Minister Nguyen Xuan Phuc said he is confident that economic growth this year will meet the government’s target of 6.7 per cent without adding to inflation, despite the weak growth in the first quarter.

Growth in the first half was therefore 5.73 per cent, driven by a 2.65 per cent increase in the agriculture sector, a 5.81 per cent increase in the industry and construction sector, and a 6.85 per cent increase in the service sector, a five-year high.

“This [GDP growth during the first half] puts the government’s target on track,” Deputy Minister of Planning and Investment Dang Huy Dong told the Vietnam Economic Forum on June 27.

The government is preparing strategies to increase exports of two key products - electronics and agriculture - and taking steps to create a more favorable business climate to support enterprises.

Tourism is expected to grow 30 per cent this year, agricultural exports will beat the $32 billion exported last year, and electronics exports will surge, countering the economic headwinds Vietnam faced in the first quarter. 

Vietnam has enjoyed a reputation as one of the best performing economies in Southeast Asia in recent years, with growth hitting more than 6 per cent in the last two years, though the 2016 figures were down against 2015.

An El Nino-induced drought, an environmental disaster, and unfavorable global economic conditions put a brake on Vietnam's GDP growth last year, holding it at 6.21 per cent, the first slowdown since 2012 and behind India, China and the Philippines in Asia.

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