World Economy

Vietnam Moving Slowly Towards Economic Growth

Vietnam Moving Slowly Towards Economic GrowthVietnam Moving Slowly Towards Economic Growth

In the first half of this year, Vietnam’s economy showed signs of rallying. The macro economy stabilized and GDP increased 5.52%.

Although the growth rate is lower than last year, it has been steady, thanks to the growth of industrial production and domestic retail sales, VietNamNet reported.

In the first half of 2016, Vietnam’s economy was strongly affected by the decline of many major economies around the world.

Domestically, it faced great losses due to natural disasters.

Nguyen Xuan Thanh, director of the Fulbright Economics Teaching Program in Ho Chi Minh City, said: “By the end of last year, we were quite optimistic about the recovery of economic growth. But in the first half of this year, Vietnam found it hard to reach its economic growth target despite the government’s drastic efforts to improve the business and investment environment.

“It’s partly due to the slow growth of the global economy, specifically global trade, but other difficulties have slowed the growth of Vietnam’s agricultural sector this year.”

Over the past six months, Vietnam’s consumer price index rose more than 1.7% compared to the same period last year.

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The Index of Industrial Production for the processing and manufacturing industry in the first six months of the year increased more than 10%. Retail sales and service revenue posted an increase of 9.5%.

In 2015, power production and distribution posted the highest increase at 11.4%, followed by processing and manufacturing sector with 10.6%, water supply, wastewater and garbage treatment at 7.4% and mining 6.5%.

In terms of industries, production of electronic products, computers and optical products went up by 37%, motorized vehicle 26.7%; leather and related products 17.4% and textile 13.9%.

During the remaining months of this year when Vietnam will fully implement several free trade agreements, its export markets are likely to expand, creating an opportunity for export revenues to rise, particularly from farming and aquatic products.

According to the ministry of industry and trade, Vietnam’s exports might grow 8.5% for the year.

Foreign direct investment attraction grew strongly, with total disbursed capital more than $7.2 billion, up 15% over last year. The total registered FDI reached $11 billion, double last year’s total at this point.

Nguyen Duc Thanh, head of the Vietnam Institute for Economic and Policy Research, says reaching the target will require greater efforts by the government, ministries, sectors, provincial authorities, and businesses.

The government should outline policies in accordance with the reforms of the public administrative system and strengthen links between ministries and sectors. Domestic enterprises should make full use of promulgated policies and international economic commitments set in free trade agreements.