Dr. Nguyen Duc Thanh: GDP growth in 2018 may reach 6.83%

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The seminar on announcement of the macroeconomic report of quarter I/2018. Photo: H.A

It is stated by Dr. Nguyen Duc Thanh, President of Viet Nam Institute for Economic and Policy Research (VEPR) at the seminar on announcement of the macroeconomic report of quarter I/2018 which was held on 10th April by VEPR.

Dr. Thanh said that according to data released by General Statistics Office of Vietnam, Vietnam’s economy in the first quarter of 2018 gained the highest growth in recent 10 years, reaching 7.38%. It seems that the positive growth rate in the two second quarters of 2017 contributed to this impressive growth rate.

The service sector grew at 6.7% in the first quarter, the highest increase in recent years. The sectors that contributed the highest rate to the overall growth rate included: wholesale and retail trade with an increase of 7.45%; Accommodation and catering services with an increase of 7.6%; Banking, insurance and finance increased by 7.72% and real estate business by 3.56%.

The first quarter also marked a strong recovery for agriculture, forestry and fishery sectors with a 4.05% increase after many years of growth rate of less than 3%, even negative growth, as in 2016 (-1.23%).

Meanwhile, industry and construction sectors gained a remarkable growth rate of 9.7%, much higher than the same period last year (2016: 6.72%, 2017: 4.17%).

According to Dr. Nguyen Duc Thanh, the manufacturing industry continues to be the main growth engine of this sector with a high growth rate of 13.56%. Samsung Vietnam continues to contribute the highest growth rate of this industry.

Specifically, export turnover (phones and accessories) of Samsung Vietnam reached US$ 12.3 billion, increasing 58.8% compared to the same period in 2017. This partly explains why Vietnam’s GDP in the first quarter of 2018 has grown strongly. At the same time, the mining and quarrying industry has gained positive growth rate of 0.4% after two consecutive years of decline.

"The manufacturing industry, especially phones and accessories, that have contributed to the high economic growth during the first quarter of this year, will pose challenges for maintaining that rate in the next quarters of 2018, and in the future when the economic growth indicators increasingly depend on the manufacturing sector” Dr. Nguyen Duc Thanh said.

According to Dr. Nguyen Duc Thanh, with a remarkable high growth rate of 7.38% in the first quarter, the group researching on macroeconomic of VEPR said that the 6.5-7.6% growth rate target in 2018 set out by the National Assembly is absolutely feasible if the current favorable conditions are maintained.

However, in the context of trade war and protectionism, the future of Vietnam’s economy is still unstable due to possible shocks from the world market. In addition, in order to reach the average inflation rate of 4%, VEPR representatives said it is necessary that stringent efforts by all levels, especially the tight monetary policy of the State Bank, should be taken.

How to meet 6.7% GDP growth target this year? The Government has set a target of achieving a GDP growth rate of 6.7% and consumer price ...

"In this context, we forecast growth and inflation in 2018 as follows: quarter I growth of 7.38%, quarter II growth of 6.51%, quarter III growth of 6.75% and quarter IV of 6.75%. The GDP is predicted at 6.83%. Corresponding to these growth rates, the inflation rate in quarters: 2.66% in the first quarter, 3.44% in the second quarter, 3.84% in the third quarter and 4.21% in the fourth quarter” DR. Nguyen Duc Thanh said.