World Economy

Vietnam’s 2017 Growth Target in Doubt

Vietnam’s 2017 Growth Target in DoubtVietnam’s 2017 Growth Target in Doubt

With first quarter growth in 2017 the lowest in the last three years at 5.1%, Vietnam’s targeted GDP growth of 6.7% this year will be a tough task, a new report says.

The quarterly report, prepared by the Vietnam Center for Economic and Policy Research, purports to be an independent assessment of the nation’s macroeconomic policies, VNA reported.

It says that the sluggish performance has brought down the Vietnam Economic Performance Index to 5.8%. The first quarter VEPI indicates an economic decline, with industrial production index up just 4.1%, the report says. Only the inventory index managed to stay high in January and February 2017, it notes.

It predicts that with such a low growth rate in the first quarter, the annual growth target of 6.7% might prove unattainable.

Inflation is slowing down and stabilizing, with a year-on-year rise of just 4.65%, due to declining prices of basic commodities.

However, the difference between core inflation and headline inflation indicates great difficulty in keeping the rate down to under 4% when consumption demand bounces back alongside public spending.

“The State Bank has exercised strict control to prevent inflation with highly efficient monetary policies. Interest rates fluctuations from the Fed’s prime rate hike in the last month and US dollar gains at the end of 2016 have been curbed in recent times. Credit is gaining fast, indicating businesses’ needs for growth,” said VEPR President Nguyen Duc Thanh.  

Thanh also felt that with a carefully monitored monetary policy, inflation can be kept to under 5%.

Overall, industrial growth was just 3.85% in the first quarter of 2017, the lowest since 2011.


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