National Financial Supervisory Commission optimistic about macro-economy in latest report.
Despite facing many challenges, GDP growth for the year as a whole will reach 6.5 per cent, core inflation around 3 per cent, and overall inflation lower than 3 per cent.
The figures are contained in a macroeconomic report for June and the first six months of the year released by the National Financial Supervisory Commission (NFSC).
The NFSC noted that in the second half of the year the economy will continue to see a trade deficit, agriculture production will face many obstacles, and State budget revenues will increase only slowly.
Despite the challenges, economic growth continued to maintain momentum with an important contribution coming from the manufacturing and processing industries. Recovery in growth has encouraged consumers and private investors.
Production and consumption in recovery
In the first six months the index of industrial production (IIP) rose 9.1 per cent; much higher than in the same period of 2014.
Recovery in Vietnam’s growth has encouraged consumption and increased private investment. NFSC figures show that total retail sales of goods and services in the first six months increased by between 9.3 and 9.5 per cent year-on-year.
In the first half newly-established businesses increased both in number and registered capital against the first half of 2014, by nearly 22 per cent and over 20 per cent, respectively. The number of enterprises forced to cease operations, meanwhile, was down 5.8 per cent.
Second half challenges
Though pleased with the first half results, the NFSC still warned there were challenges to overcome in the second half of the year.
The trade deficit and agricultural production are facing difficulties and State budget revenues will only grow slowly.
The trade deficit for the first half is estimated at $3.75 billion, or 4.8 per cent of export turnover. The FDI sector recorded a trade surplus of $6.07 billion while the domestic sector recorded a deficit of $9.83 billion.
Exports increased slowly while imports increased rapidly. In analyzing the structure of imports, NFSC said that the trade deficit has increased due to lower world commodity prices and because Vietnam’s economic structure is dependent upon imported machinery and raw materials for production.
In the agriculture sector, the difficulties facing agricultural production have seen its growth increase slowly. Agriculture’s GDP in the first six months increased by just 2.16 per cent, 2.96 per cent lower than in the same period of 2014.
Despite the difficulties, in the second half of the year, with recovery clearly seen in the first half, GDP growth is forecasted at 6.3 per cent for the first nine months and 6.5 per cent for the year as a whole, along with an annual core inflation rate of 3 per cent and overall inflation of less than 3 per cent.