Vietnamese economy warming

by NDO31 December 2017 Last updated at 06:00 AM

The industrial sector has shown clear signs of recovery, becoming an important driver for economic growth. (Credit: L.ANH/NDO)
The industrial sector has shown clear signs of recovery, becoming an important driver for economic growth. (Credit: L.ANH/NDO)

VTV.vn - 2017 can be considered as a special year as, for the first time in many years, Vietnam fulfilled and surpassed 13 socio-economic development targets, of which the GDP growth rate was at 6.81%, the highest level in nearly ten years.

In addition, a stabilised macroeconomy, along with controlled inflation, a sharp increase in exports, trade surpluses, and the recovery of the industrial sector became important drivers for economic growth.

According to Prime Minister Nguyen Xuan Phuc, at present, the Government can affirm that Vietnam's economy is continuing to develop strongly, achieving comprehensive results in all areas. It reached and exceeded all 13 set targets, creating an active atmosphere in the business environment and among the whole society, while reinforcing the people's trust.

2017 also witnessed the spirit of innovation and startups spreading through society. The number of newly established enterprises this year reached a record of 126,859, with newly and additional registered capital reaching more than VND3 quadrillion (US$132 billion). In addition, over 25,000 enterprises have resumed their operations.

The foreign direct investment (FDI) sector has made an increasingly important contribution to socio-economic development. Registered FDI reached a record high of over US$35 billion, up 30%, with US$17.5 billion disbursed, the highest in ten years.

Vietnam’s rankings in terms of the business environment and national competitiveness have also improved. According to a report released by the World Bank, Vietnam was placed 68th out of 190 economies in business environment rankings in 2017, 14 places higher than in 2016 and 30 higher than in 2012. The World Economic Forum (WEF) increased Vietnam's competitiveness by five steps in 2017 to rank 55th among 137 countries, up 20 levels compared to five years ago. In November, rating agency Moody's also raised the outlook on Vietnam’s banking system from stable to positive.

In 2017, the stock market witnessed a nine-year peak, accompanied with trading volumes and values reaching record high levels. By the end of November, the VN Index had risen by 42.87%.

The socio-political sector maintained its stability, while foreign affairs and international integration have been strengthened and achieved positive results, with the successful organisation of the APEC Year 2017, helping to raise the position and prestige of Vietnam within the international arena.

In the long-term, economic restructuring, associated with growth model innovation, has resulted in initial achievements, enabling the economy to gradually reduce its dependency on the exploitation of natural resources, especially oil and gas.

According to PM Phuc, achieving and exceeding all of the 13 set targets is a great success, especially in the context of the economy gradually transforming its growth model in the direction of reducing resource exploitation in order to focus on processing, manufacturing and hi-tech agriculture.

According to economic experts, the important cause for the afore-mentioned results is the efforts of the whole political system, the business community and people’s contribution, along with the Government's comprehensive and drastic solutions.

Economist Huynh The Du, from Fulbright Economics Teaching Programme, said that the "action, action and action" approach by the head of the Government has brought about positive results. It is proven by both the official indicators by international organisations and the market’s reactions. The measure can be made in different angles, but the warming of the Vietnamese economy is hard to deny.

According to Director of Vietnam Institute of Economics Tran Dinh Thien, although there are problems that need to change, economic growth has seen positive signs in 2017. The economic sectorial structure has begun to shift, from the mining sectors to the manufacturing and services industries. The creative startup trend is also booming, along with increased investments in hi-tech agriculture.

Head of General Statistics Office of Vietnam Nguyen Bich Lam revealed that Vietnam’s GDP in 2017 was estimated to increase by 6.81% over 2016, higher than the increase of the years from 2011 to 2016. GDP growth in 2017 follows a higher quarter-on-quarter trend. Specifically, the first quarter increased 5.15%; second quarter up 6.28%; third quarter 7.46% and the fourth quarter increased by 7.65%. The figure is higher than the set target by the National Assembly (at 6.7%). It also confirms the effectiveness of the solutions issued by the Government that have been drastically implemented at all levels, sectors and localities.

In the increase of 6.81%, the agriculture, forestry and fishery sector has recovered significantly with an upsurge of 2.9%, higher than the increase of 1.36% in 2016, contributing 0.44 percentage point to the overall growth of the economy. The industrial and construction sector increased by 8%, contributing 2.77 percentage points, while the services sector was up 7.44%, contributing 2.87 percentage points.

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