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Vietnam Today

Q1 GDP at 5.1% y-o-y

Released at: 17:28, 30/03/2017

Q1 GDP at 5.1% y-o-y

Photo: anhp.vn

Result puts 2017 target of 6.7% in doubt.

by Ngoc Chi

Vietnam’s GDP increased 5.1 per cent year-on-year to VND931.6 trillion ($40.9 billion) in the first quarter of the year, according to the latest figures from the General Statistics Office (GSO).

The services sector recorded the highest growth, of 6.52 per cent, representing 2.65 percentage points of total value.

The industrial and construction sector increased 4.17 per cent, contributing 1.46 percentage points, while agriculture, forestry and fisheries rose 2.03 per cent, for 0.24 percentage points.

First-quarter GDP growth was higher than in the same period of 2012-2014 but lower than in 2015 and 2016, according to Mr. Nguyen Bich Lam, GSO General Director.

“The low GDP growth in the first quarter will affect the goal of 6.7 per cent for the year,” Mr. Lam said. “When the economy exhibits sign of a downturn, it will be difficult to reach the target unless there is a breakthrough.”

The GDP growth target of 6.7 per cent for 2017 is equal to the target set for 2016, while inflation is targeted at 4 per cent against the 5 per cent targeted last year.

Exports are to increase by 6 to 7 per cent, the trade deficit is to be 3.5 per cent of export turnover, and social investment capital is to represent 31.5 per cent of GDP. Household poverty is targeted to decline by 1-1.5 per cent and 82.2 per cent of the population is to have health insurance.

The National Assembly’s plans continue to target a stable macro-economy, economic restructuring associated with the growth model, and improved competitiveness. It also looks to encourage sustainable startups, ensure social welfare, proactively respond to climate change, increase environmental protection, and step up administrative reform. 

The original GDP target of 6.7 per cent for 2016 was later revised down to 6.3-6.5 per cent. A number of setbacks caused the economy to cool down, including drought and saltwater intrusion in the Mekong Delta in the early months of the year and mass fish deaths along the central coast following a pollution incident at a steel mill in Ha Tinh province. Agriculture and mining activities were especially hard-hit.

However, Vietnam’s GDP growth is still forecast at 6.5-6.7 per cent for 2017. During her visit to Vietnam from March 22 to 24, World Bank CEO Ms. Kristalina Georgieva said that most countries are growing at a slow 2.3 per cent, so Vietnam’s rate is quite impressive. 

She also committed that the World Bank would boost its support to the country in the years to come, focusing on sustainable growth and reform of the investment environment.

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