Positive signs of the economy in the first half of 2019

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illustration image. Source: Internet

Achieving high results in a difficult context

According to Nguyen Bich Lam, Director General of the General Statistics Office, economic growth in the first half of 2019 achieved a good growth rate by 6.76%. Along with that, the macroeconomy was stability, exports created an important impression and inflation was controlled at the lowest rate in three years. The production capacity of the economy expanded, creating momentum for Vietnam's economy to develop in the following months.

Specifically, though the increase of 6.76%, GDP in the first half of 2019 was lower than the growth of the same period in 2018, it was higher than the increase of the first six months of the years from 2011 to 2017. This confirmed the timeliness and efficiency of the Government’s solutions to remove difficulties for production and implement the socio-economic development plan in 2019. In the overall increase of the whole economy, agriculture, forestry and fishery sectors increased by 2.39%, contributing 6% to the overall growth rate; industry and construction sector increased by 8.93%, contributing 51.8% and the service sector increased by 6.69%, contributing 42.2%.

In the first six months, the agriculture, forestry and fishery sector also faced difficulties and challenges. The agriculture sector was strongly affected by climate change causing droughts and natural disasters; African swine fever, foot-and-mouth disease spread strongly along with the decline in agricultural export prices. As of June 25, 2019, African swine fever had occurred in 60 localities. The total number of pigs culled nationwide was 2.82 million, accounting for 10% of the total herd. In this context, the industry has still maintained its growth rate over the same period thanks to the positive contribution of the fisheries and forestry sectors. In particular, forestry has been a good field since the beginning of the year in both production and export.

In the industrial sector, the processing and manufacturing industry continued to play a key role leading the overall growth of the industry and the economy with an increase of 11.18%. Although it was lower than the increase of the same period in 2018, it was higher than the increase in the first six months of the years from 2012 to 2017. Especially, according to Lam, the mining industry initially increased slightly by 1.78% after three consecutive years of reduction. This came from strong coal mining, compensating for the decline of crude oil exploitation.

Notably, export turnover increased quite well, reaching US$122.72 billion, up by 7.3% over the same period with 22 items reaching export value of US$1 billion or more, contributing to creating output for products. In particular, the export turnover of vegetables and fruits reached $2 billion. This was a new breakthrough for tropical agricultural products. Vietnam has still occupied a strong trade position in trade relations with a number of potential markets such as the US and EU. This is a remarkable result in the context of the international trade pace is still quiet anddemand has decreased significantly.

Many bright points of the economy

The economic picture in the first half of 2019 showed the supply and demand of domestic goods has been guaranteed, while foreign direct investment and business registration have continued to be the bright spot of the economy. Accordingly, foreign direct investment (FDI) hit a record of the number of newly registered projects in the first six months and the highest capital in recent years with 1,723 new licensed projects and total registered capital was $7,411 million. Total capital that FDI enterprises poured into the domestic economy by the end of June reached more than $18 billion.

Also in the first six months of this year, there were nearly 67,000 enterprises registered for new establishment,the highest number in the last five years. In particular, inflation has been controlled at an increase of 2.64% compared to the same period of 2018, the lowest growth of six-month average in the last three years. This was also considered one of the outstanding achievements when there were many factors affecting domestic commodity prices such as the increase in electricity prices, essential fuel prices in early 2019.

Regarding the growth prospect from now until the end of the year, Duong Manh Hung, Director of the National Accounts System Department, General Statistics Office said, the growth target of 6.6% -6.8% in 2019 is feasible. Accordingly, although manufacturing of processing and manufacturing industry does not increase as fast as 2018, it still maintains a relatively high level. Besides, according to the data, there is 83.5% of manufacturing and processing enterprises evaluated that the production situation in the second quarter was better than the first quarter and 88.6% of enterprises believed that the third quarter would be better than the second quarter. Hung said businesses were quite optimistic about business prospects. However, it was noteworthy that while the progress of disbursing public investment capital is still low, trade agreements would have a multidimensional impact on imports and exports.