Thursday,  Jul 19, 2018,05:20 (GMT+7) 0 0
Vietnam economy seen expanding 6.83% in 2018
The Saigon Times Daily
Wednesday,  Apr 11, 2018,23:24 (GMT+7)

Vietnam economy seen expanding 6.83% in 2018

The Saigon Times Daily

Discounted travel bags are on sale at a booth of a local company at a trade fair. Inflation in quarter one rose slightly compared with previous quarters, largely influenced by upward adjustments of public services fees such as healthcare and education - PHOTO: THANH HOA

HCMC – Vietnam’s gross domestic product (GDP) growth is forecast to reach 6.83% this year, the Vietnam Institute for Economic and Policy Research (VEPR) is quoted by news website Nguoi Dong Hanh as saying.

Given the strong growth of 7.38% in quarter one, VEPR says the 2018 growth target of 6.5-6.7% approved by the National Assembly (NA) could be achievable thanks to a host of favorable conditions.

However, there remain uncertainties such as growing protectionism in global trade and a possible trade war between the United States and China, the world’s two biggest economies.

VEPR expects the 2018 growth model will be different from that of previous years with growth in the remaining quarters not as strong as in quarter one.

GDP in the second, third and fourth quarters is projected to expand 6.51%, 6.84% and 6.75% respectively. The full-year economic growth rate is estimated at 6.83%, above the NA-approved target, according to VEPR.

Nonetheless, Nguyen Bich Lam, general director of the General Statistics Office, said at a recent conference on social and economic performance in quarter one that the NA’s growth target was tough to attain.

The U.S. corporate tax reductions might leave adverse impact on the Vietnamese economy, Lam said, because American companies may return to their country for investment, so foreign capital may also flow to the U.S.

The level of Vietnam’s economic openness measured by registered imports and exports is quite high, at over 200% in 2017.

“Quarter-one growth is often of seasonal nature, and it is usually low. There were still seasonal factors this year, but they did not much affect growth as in previous years. Therefore, the GDP rate in quarter one was high,” Lam said.

The first-quarter industrial production index rocketed 11.6% over the year-ago period, of which the manufacturing and processing sector expanded 13.9% but its added value came mainly from the foreign direct investment (FDI) sector.

“This shows Vietnam’s economic growth is increasingly dependent on the FDI sector, especially Samsung,” said VEPR president Nguyen Duc Thanh.

The inflation rate in quarter one rose slightly compared with previous quarters, largely influenced by upward adjustments of public services fees such as healthcare and education, and somehow the monetary easing policy of the central bank.

Prices of food and foodstuffs in February were higher than in January due to the shopping spree in the lead up to the Lunar New Year holiday, or Tet. Core inflation seemed slightly higher because of the aforesaid policy.

VEPR forecast inflation in quarters two, three and four would be 3.44%, 3.84% and 4.21% respectively.

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