VINACHEM

"There are many reasons for the belief that the 6.5 per cent GDP increase target set for the whole year is achievable," he told a meeting to receive the country's socio-economic statistics to June 30.

The rise in GDP for 2010 was 6.16 per cent higher against the end of 2009 and 1.6 times higher than for first six months of last year.

The rate was quite high when the difficulties the world economic recession had caused were taken into account, he said.

First-quarter GDP grew by 5.83 per cent and by 6.4 per cent from April to June.

The value of industrial production rose by 13.6 per cent from January to June and that of agriculture by 5.4 per cent.

The basic wage had risen since the beginning of May and the supply of cash in the economy had risen 10 per cent compared with the first six months of last year.

But the Consumer Price Index had risen by only 4.78 per cent against last December.

Although many economists had forecast a CPI rise of between 0.3 and 0.37 per cent last month, the index had risen only 0.22 per cent compared with May.

The Government's commitment not to raise prices of essential goods meant the CPI was likely to be less than 8 per cent by the end of the year, the acting director said.

Challenges

Challenges still facing the economy tempered the encouraging GDP figures.

General Statistics Office's National Accounts Systems director Bui Ba Cuong cautioned that the trade deficit accounted for 15 per cent of GDP and Viet Nam still had to import 80 per cent of the materials it required despite a 15.7 per cent rise in the value of exports.

If this continued, the country would be hard pressed to create a budget surplus, he said.

In addition, the appreciation of the yuan could increase costs because imports from China cost US$9.1 billion to June 30, 34 per cent more than the same six months of last year.

Viet Nam's trade deficit with China was $6 billion last year - 90 per cent of the total.

But reducing the deficit was difficult because 93 per cent of imports from China were for production, equipment and machines.

Limiting them would have a negative impact on domestic production.

The director said GDP growth was mostly dependent on investment; productivity contributed only 20 per cent and this meant unstable development.

Labour productivity in many other ASEAN countries was twice as high as that in Viet Nam.

Quality of growth, rather than quantity, must be given more attention, he warned.

The General Statistics Office representatives also called for a more efficient regulation of power generation and distribution to avoid harmful electricity outages.

Statistics showed that electricity supply to June 30 rose by 15.7 per cent against the first six months of last year but had still failed to match increased demand.

(Source: VNS)