No change in economic targets
National economy out of the woods
Vietnam needs to stabilize macroeconomy
Thuc made his comments at a press conference in Hanoi on June 29 regarding socio-economic situation in the first half of this year.
He said the country's gross domestic products (GDP) grew 4.38 percent in the first six months against the same period last year.
“Although the growth was lower than that targeted for the whole year at 6-6.5 percent, the GDP was recognized as being in an upward trend. GDP growth in the second quarter was 4.66 percent, whereas it was merely 4 percent in the first one,” Thuc said.
The growth stemmed from a better performance of industrial and construction sectors which had a high proportion of influence over other sectors. Manufacturing and construction areas saw a solid growth at 4.52 percent in the second quarter, compared to 2.94 percent in the first.
In the first half, services reflected the highest growth at 5.57 percent, next was manufacturing and construction, which expanded 3.81 percent; the agro-forestry and seafood sector went up only 2.81 percent.
Meanwhile, the consumer price index growth had been curbed by gradually decreasing growth in the first half.
CPI increased 1 percent and 1.37 percent in January and February. Then the growth rate inched up 0.16 percent, 0.05 percent and 0.18 percent in March, April and May, respectively.
The index showed a fall in growth of 0.26 percent in June, the first period of negative growth in 38 months of a rising index.
The State budget increased 5.1 percent, as a result of over-expenditure which was held at 4.8 percent, lower than the target of 5 percent, the ministry reported.
Exports skyrocketed by 22.2 percent, whereas imports maintained a lower growth at 6.9 percent in the first half, making trade deficit slow down nine times lower than in past years.
According to the ministry, the total investment capital of the whole socio-economy reached VND431.7 trillion (US$20.56 billion) in the first half, a year-on-year increase of 10.1 percent and equal to about 34 percent of the total GDP. Of this, State-owned capital was VND158.7 trillion (US$7.56 billion), accounting for 36.8 percent, rising 6.8 percent against the same period last year.
The non-State sector hit VND163 trillion (US$7.76 billion), making up the highest proportion at 37.7 percent, increasing 18.1 percent. The remainder was contributed by the FDI sector with a growth rate of 4.2 percent.
However, Thuc said that Vietnam faces lower demand and it is a hindrance and a challenge for stable economic development.
“It requires appropriate policies on finance, currency, banking interest rates, total outstanding loans and public investment among others. The policies must be governed timely under strict control in order to ensure effective economic development and inflation is reined in,” he said.
Poor demand was shown by high goods inventories, Thuc said. The inventory index of industrial products was 26 percent in June, whereas the indices represented growth rates ranging from 26.9 percent to 34 percent in the first five months.
A number of enterprises that stopped operations in the first half reached 26,324, up 5.4 percent from the same period last year, whereas figures of newly established companies slumped 12.5 percent year-on-year, he said.
The unemployment rate was 2.22 percent, slightly higher than the previous corresponding time.
According to Thuc, with current impediments and poor demand, it would not be easy for economic growth to surpass 6 per cent for the whole year.