Vietnam's GDP remains low despite great advantages

04:24' PM - Thursday, 01/06/2017

The low GDP growth rate in the first quarter of 2017 is a hot topic of discussion at the ongoing National Assembly session.

“If you ask any NA Deputy if the targeted GDP growth rate of 6.7 percent is attainable this year, they will say this is a difficult task,” said deputy chair of the National Assembly’s Finance & Budget Committee.

According to Nha, there were two unattainable goals in 2016 – the export growth rate and GDP growth rate. This affected the budget.

The National Assembly had approved the state budget based on a predicted GDP growth rate of 6.7 percent, or VND5,100 trillion. But the real GDP growth rate was 6.2 percent, or VND4,600 trillion only.

What Vietnam may see in 2017 is that overspending does not decrease, but the growth rate decreases.

“I am afraid that the GDP growth rate this year is even lower than the 6.21 percent of the last year. If so, the GDP of the two years (2016 and 2017) would be VND1,000 trillion lower than expected,” he said, adding that this would put pressure on the budget.

“If it is foreseeable that the GDP growth rate is unattainable, it is necessary to adjust other targets, including budget spending,” Nha said, emphasizing that only when overspending decreases will the budget become healthy and stable.

NA chair Nguyen Thi Kim Ngan on May 25 also expressed her concern that economic indicators are on the decrease though reports all say the Vietnam economy is recovering.

The GDP growth rate in 2016 was lower than 2015, while the growth rate in the first quarter of 2017 was lower than the first quarter of 2016.

“The current conditions now are more favorable than last year, with no natural calamities, while the Formosa problems have been settled gradually. We have clement weather, favorable terrain and concord among the people, but why is the economic growth rate still low?” she said.

Commenting about the economic performance in 2016 and the first quarter of 2017, Tran Hoang Ngan, an economist and NA Deputy said: “We must not let Vietnam economy depend too much on Samsung.”

The scandal with Galaxy Note 7 has affected Samsung’s exports and therefore, affected Vietnam’s exports.

“This is an evidence showing that Vietnam is too reliant on foreign conglomerates,” Ngan commented. “When they have problems, their risks will immediately influence Vietnam's macro economy.” - VNN -

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