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Vietnam Today

PM: Concrete solutions needed for GDP growth

Released at: 12:16, 05/10/2016

PM: Concrete solutions needed for GDP growth

Photo: Viet Tuan

7.1-7.3% growth needed in last quarter to reach annual target after disappointing first half result.

by Duy Anh

Prime Minister Nguyen Xuan Phuc urged ministries, industries and localities to make every effort to achieve GDP growth this year of 6.3 to 6.5 per cent at the monthly cabinet meeting on October 3 and 4.

To reach the target he urged the government to create the necessary conditions and remove all obstacles for businesses and the people. “Determination is not enough. We need to have concrete solutions,” the PM stressed.

The General Statistics Office (GSO) revealed on September 29 that GDP growth in the first nine months of the year was estimated at only 5.92 per cent, lower than in the same period last year.

Low growth in agriculture and mining dragged down the economy in the third quarter, it noted. The mining sector continued its losing stretch, contracting 6.8 per cent in the third quarter compared to a year ago due to low global commodity prices.

“GDP growth in 2016 will be lower than the 6.7 per cent target but how much lower will very much depend on the mining sector,” said Mr. Ha Quang Tuyen, Head of GSO’s National Accounts Department.

Despite the lower-than-expected growth, PM Phuc remains positive about the economy, stressing that it enjoyed some upbeat results in the first nine months, including increases in both FDI and the trade surplus.

To achieve the 6.7 per cent target the economy needs to grow 7.1 to 7.3 per cent in the fourth quarter. Though high it is achievable, the PM said, because the economy often sees higher growth in the last quarter of a year.

Economists also believe there is still a chance that the economy can pick up speed in the final quarter, fuelled by more FDI and a recovery in agriculture.

Vietnam has received an estimated $11 billion in FDI in the first nine months, up 12.4 per cent year-on-year. Agriculture, which recorded negative growth of 0.18 per cent in the first half, showed signs of recovery in the third quarter, edging up 0.65 per cent.

The Asian Development Outlook Update (ADOU) 2016 was released on September 27 by the Asian Development Bank (ADB), in which it revised its forecast for Vietnam’s economic growth downwards, to 6.0 per cent in 2016 and 6.3 per cent in 2017, as a result of contractions in the agriculture and mining sectors in the first half.

PM Phuc urged authorities and ministries to “take drastic measures to reach beyond the ADB forecast.”

Regarding the sale of stakes in State-owned enterprises (SOEs), the PM emphasized the need to publicly select qualified consultants to prevent any loss of State capital caused by incorrect valuations while selling shares held by the State Capital Investment Corporation (SCIC).

He gave the instruction after hearing Minister of Finance Dinh Tien Dung’s report on SCIC’s selling of shares in enterprises listed on the stock market and those in the unlisted public company market (UPCom).

The SCIC reported that it successfully sold stakes in 12 enterprises in 2014 and 2015. According to the finance ministry, the corporation’s divestment over the years is in line with the law and helps hasten the sale of State capital in SOEs.

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