Positive signs for Viet Nam's economy

Business Desk
Viet Nam News
Publication Date: 26-06-2009

The national economy will see positive developments in the second half of the year, following the first half in which the global economic downturn caused major industries to experience sharp decreases, says the Ministry of Planning and Investment.

In a report released Wednesday, the ministry said the national GDP grew by just 3.9 per cent in the first six months of the year, compared to 6.5 per cent rate during the same period a year ago.

Hardest hit by the global crisis was the industrial sector, which posted a production value growth rate of only 4.8 per cent, against 16.5 per cent in the corresponding period last year. With the help of the Government stimulus package, however, industrial production value reached VND324 trillion (US$18.2 billion) in total in the first half of the year.

Vo Tri Thanh, deputy director of the Central Institute for Economic Management, predicted that industry would recover in the second half of the year, driven by a high growth rate in the construction sector.

The services sector, meanwhile, grew by 5.5 per cent during the period, compared to last year’s 7.6 per cent of the same period last year. Retail services, transportation of cargo and passengers, and telecommunications services all eked out steady growth.

Exports fell 10 per cent during the period, however, earning only $27.6 billion in the first six months of the year. A few agricultural products bucked the trend, with rice exports up 56.2 per cent, coffee exports up 22.3 per cent, and tea exports up 10.9 per cent. Seafood exports also managed positive growth.

Foreign investment slowed during the six-month period, but disbursements were at a remarkable 45 per cent of total new registered capital. Foreign Investment Agency general director Phan Huu Thang said foreign direct investment (FDI) inflows remained acceptable.
Inflation

The General Statistics Office (GSO) also issued June inflation figures Wednesday, showing that the consumer price index (CPI) rose 0.55 per cent over the previous month.

Overall inflation during the first six months was 2.68 per cent.

According to the deputy head of the GSO trade and price department, Nguyen Duc Thang, strong increases in the prices of some essential goods such as food and fuel have put pressure on the prices of other goods and services.

The Government stimulus package – which drove total retail sales of goods and services in June up 2.3 per cent over May – was also creating some inflationary pressure, Thang said.