GDP makes breakthrough in growth pace in Q2

The gap of GDP growth rate between Q1 and Q2 has been expanded by 1% which was regarded as a breakthrough as it used to be at 0.3-0.4% in the past, the General Statistics Office (GSO) reported.

GSO General Director Nguyen Bich Lam reported that the total GDP grew 5.73% in against the same period last year; 5.15% in Q1 and 6.17% in Q2.

The highest rate over the last five years

The space of 1% in GDP growth rates in the first two quarters reflected a breakthrough thanks to the Government's great effort in economic management, and better business environment. Normally, GDP in Q2 is only 0.3-0.4% higher than that of Q1.

In the first six months of 2017, the socio-economic performance progressed positively. The macro-economy was stabilized. Inflation rate was put under control. Interest and exchange rates were kept stably. The business and investment environment was improved. Export surged sharply. The number of foreign visitors and FDI projects increased.

The GSO reported that out of the 5.73% GDP growth rate, the agro-forestry-fishery sector expanded 2.65%. The industry and construction sector picked up 5.81%. Services soared 6.85%. These were the highest performance over the last five years.

In Q2, 17 out of the 21 industries saw higher growth rates in comparison with the previous quarter. Accordingly, the manufacturing and processing industry grew 10.5% against the same period last year. Construction also made impressive growth pace of 8.5%.

In the January-June period, consumer price index jumped only 4.15%, lower than the rate of 4.96% in Q1. The figure showed that inflation was on decline and kept at reasonable rate. Overseas shipment picked up 18.9%. Imports grew 24.1%.

Especially, as of June 20, Viet Nam attracted 1,183 FDI projects with a total registered capital of US$ 11.84 billion, up 56.3% in number and 57.9% in value in comparison with the same period last year.

In , 61,276 enterprises were founded with a total registered capital of VND 596 trillion, up 12.4% in number and 39.4% in value and VND 9.7 billion on average value.

Nevertheless, the domestic economy coped with numerous difficulties, including low GDP growth rate than estimate; slow capital disbursement, affected agriculture production due to saltwater intrusion and declining agricultural costs.

Especially, growth model transformation has yet made a breakthrough. Processing and manufacturing chiefly relies in processing with high medium costs and low added value, and poor labor productivity.

In addition, trade gap rebounded at an estimated value of US$ 2.7 billion in the first half. Disbursement of public capital was slower than previous years.

Possibility of 6.7% growth pace in 2017

General Director Lam said that it is a big challenge for Viet Nam to achieve the preset goal of 6.7% for 2017. GDP growth rate must touch 7.4% in the rest of the year.

So far, GDP has yet expanded 7.4% in H2 in the history, Mr. Ha Quang Tuyen, Head of the National Account Department under the GSO was quoted as saying. However, there are still opportunities for Viet Nam, he added.

Business sector offers resource for economic growth in H2. Accordingly, the number of newly-founded firms was 61,000 in . Meanwhile, 15,000 enterprises resumed operation. They are expected to provide a great source for economic growth.

Total social development capital accounted for around 34-35% of GDP, expecting to spur economic growth.

The processing and manufacturing industry owned abundant opportunities to flourish by year end. As some large-scale steel projects will operate at the end of 2017. The construction sector was forecast to enjoy a 10% hike, thus contributing to economic growth./.

Source: Online Newspaper of the Government of the Socialist Republic of Vietnam