VINACHEM

Vietnam’s economy continued recovering during the first nine months of 2015 and showed improved performance from the same period last year, as illustrated in encouraging indexes.

Minister of Planning and Investment Bui Quang Vinh is confident that the country will attain the target gross domestic product (GDP) growth rate of 6.2 percent with hopes for over 6.5 percent in 2015 – a five-year high.

General Director of the ministry’s General Statistics Office (GSO) Nguyen Bich Lam said the nine-month expansion was mainly fanned by the revitalisation of industrial production, particularly processing and manufacturing, and the buoyancy of production and export activities of foreign invested businesses.

Domestic consumption, purchasing power and aggregate demand were also on the upward trend thanks to improved trust in macro-economic stability, faster economic growth and inflation slowdown.

GDP between January and September hiked 6.5 percent – the widest pace from the same period in the last four previous – and quickened quarter-on-quarter, Lam noted, describing the 9.8 percent increase in the industrial production index within the period as the most notable.

Core inflation in September rose by 0.06 percent from a month earlier and 1.87 percent from the previous year, contributing to a yearly spike of 2.15 percent over the nine months.

Deputy Head of the GSO’s Price Statistics Department Nguyen Thi Ngoc considered the current core inflation of around 2-3 percent as balanced. Since it is the measurement on which monetary policies are adapted, it is helping ensure macro-economy and more sustainable economic growth.

A GSO survey also indicates the business circle’s confidence in their performance. During the January – September period, 68,000 companies were established while the number of those resuming operations and dissolving declined compared to a year earlier.

The office said a credit augmentation created momentum for business activities, noting that the credit growth rate posted at 10.78 percent by September 21, doubling the figure recorded during the same period in 2014.

Associate Professor Dr Ngo Huong from the Banking University of Ho Chi Minh City pointed to the role of the abundant supply of concessional loans in the nine-month GDP upturn as it helped enterprises extend their operations.

The recovery of major economies in the world, especially Vietnam’s export destinations, also fuelled economic growth.

By the end of September, total export turnover had reached 120 billion USD, up 9.6 percent from a year before. About 82.2 billion USD, excluding earnings from crude oil, was gained by FDI companies, representing a year-on-year rise of 21.1 percent and 68.1 percent of the total shipments.

Implemented foreign direct investment capital soared by 53.4 percent annually to 17.16 billion USD as a surge in the number of new projects and those with additional capital demonstrated a substantial improvement in the local business climate and raised investor confidence.

However, experts also highlighted certain challenges the country is encountering such as the nosedive of global oil and goods prices, unpredictable fluctuations in international financial markets, and downturns in a number of major economies partly impacting Vietnam’s import and export activities.

They continued, marking severe natural disasters curbing the development of the agricultural and aquacultural sectors, a tumble in the volume and value of agro-fishery products, sluggish economic restructuring and limited implementation of business environment improvement policies.

Despite such aspects, Minister Vinh believed that the Vietnamese economy would continue recovering over the rest of 2015, stressing the necessity to flexibly employ monetary, fiscal and other policies and particularly adjust interest and exchange rates in accordance with domestic and global economic changes.