Vietnam sees seven-year high of GDP growth in Jan-Jun

The GDP growth of Vietnam in the first six months of this year reached 6.28 percent, the strongest rise since 2009, Minister of Planning and Investment Bui Quang Vinh said at a meeting in Hanoi this week.

The updated GDP figure is 0.17 percent higher than the previous estimate of 6.11 percent released by the Ministry of Planning and Investment on Tuesday, Minister Vinh said at the inter-ministerial working group meeting on the macroeconomic situation on Thursday.

The actual gross domestic product expansion in the first and second quarter was at 6.08 percent and 6.44 percent, the official said.

With the latest GDP figures, which are the best in the last seven years, the economic recovery of Vietnam seems to be well on track, Minister Vinh said.

Earlier this year the central government projected 6.2 percent in GDP growth for 2015.

Meanwhile, the consumer price index (CPI), the benchmark for inflation, edged up 0.35 percent over last month in June, bringing the CPI rise in the first half of this year to 0.86 percent.

The CPI in January-June represented a 2.24 year-on-year increase, according to the ministry.

Talking to the press after the meeting, Minister Vinh said that although there are bright spots including better GDP growth and a low CPI increase, the economy is still facing significant challenges.

The first one is the declining agriculture sector, which contributed 3.44 percent to GDP in 2014, but that figure plummeted to just 2.17 percent in the first half of 2015.

"The sector is under threat, as drought is happening in many places in the central region, while the yields of many kinds of crops have dropped nationwide,”

The exports of aquatic products have also declined due to many reasons, stirring up concerns as agriculture is a pillar supporting the national economy and attracts the largest proportion of Vietnamese laborers," Minister Vinh stressed.

The second problem for Vietnam is the return of a high trade deficit, at around US$3.8 billion, or 4.7 percent of total export turnover during the six-month period.

“As the figure is expected to rise to around five percent for the whole year, it will put pressure on the foreign exchange rate and the value of the Vietnamese dong,” the official said.

Minister Vinh’s third concern is the processing industry, despite its large contribution to the GDP growth, as it is mainly dominated by the foreign-invested sector.

GDP breakdowns showed that during the period, agriculture-forestry and fisheries expanded 2.16 percent, industry and construction rose 8.36 percent, and service went up 6.18 percent.

In the first half, there were over 14,400 newly registered businesses with total capital of nearly VND282.4 trillion ($13 billion), an increase of 20 percent over the same period last year, according to the Ministry of Planning and Investment.

The ministry said the industrial production index soared 9.6 percent in the first half compared to the same period of 2014.

Vietnam posted $77.7 billion in exports, up 9.3 percent year on year, whereas total imports topped $81.5 billion, up 17.7 percent over the same period last year.

The foreign-invested sector ran a trade surplus of $6.07 billion, while the domestic sector suffered a $9.83 billion deficit.

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Vietnam sees seven-year high of GDP growth in Jan-Jun

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