Unloading goods containers at Cai Mep International Port in Ba Ria-Vung Tau province (Photo: VNA) Hanoi (VNA) – Although Vietnam’s economymaintained an uptrend in the first five months of 2018, growth rates in someindustries have slowed down, making it difficult for the country to achievethis year’s targets.
According to the General Statistics Office(GSO), industrial production in May rose by 7.1 percent year on year. Of which,mining contracted 7.6 percent while processing and manufacturing increased 9.1percent and electricity production and distribution expanded 11.2 percent.
These rates are lower than the correspondingfigures in April. Notably, the mining industry fell by a further 2.6 percentagepoints and processing and manufacturing dropped 3.2 percentage points. Onlyelectricity production and distribution hiked 1.5 percentage points due to anincrease in power consumption in summer.
Between January and May, industrial productionclimbed 9.7 percent from a year earlier, higher than the 6.6-percent growth inthe same period last year. Processing and manufacturing grew 11.8 percent,electricity production and distribution rose 10.6 percent, but mining declinedby 2.2 percent.
The GSO said although processing andmanufacturing continued to post a fast growth pace, it has slowed down, from15.5 percent in January – February to 14.1 percent in January – March, 12.5percent in January – April and 11.8 percent in the five months.
Meanwhile, food prices have rebounded, whichwill boost food production but also influence the consumer price index (CPI),which is targeted at 4 percent at most in 2018.
The CPI in May grew 0.55 percent from theprevious month, the highest rate since 2012, 3.86 percent from the same periodlast year and 1.61 percent from last December.
Do Thi Ngoc, Director of the GSO’s PriceStatistics Department, pointed out the surge in pork and animal feed prices.The Price Management of the Ministry of Finance attributed the CPI hike partlyto the increases of petrol and gas prices and grain food prices, which wasboosted by stronger rice export demand.
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On the other hand, GSO data also showed lesspositive signs for business activities. More than 11,000 new enterprises withregistered capital of 104.8 trillion VND were set up in May, down 24 percent inthe business number and 21.5 percent in capital from April. They registered80,500 employees, down 24.5 percent.
The number of firms resuming operations in Maywas more than 2,300, down 29.7 percent month on month.
A decrease was also recorded in foreign directinvestment (FDI). This year to May 20, Vietnam granted new investment licensesto 1,076 FDI projects worth over 4.65 billion USD, up 14.6 percent in theproject number but down 16.8 percent in value. As many as 393 existing projectsregistered to raise their capital by over 2.49 billion USD in the five months,down 47.4 percent year on year.
New and additional FDI capital in the period hitabout 7.15 billion USD, an annual decline of 30.8 percent.
Aside from the abovementioned factors, thereremain problems in the economy, including growth’s dependence on quantityinstead of quality, low labour productivity compared to many countries and theupward trend of CPI in the months to come.
Vietnam aims to achieve economic growth of atleast 6.7 percent in 2018, the same target as 2017.
To reach this year’s targets, Minister ofIndustry and Trade Tran Tuan Anh stressed the necessity for more support forbusinesses in processing and manufacturing, a core industry of the economy.
Meanwhile, Director of the GSO’s IndustrialStatistics Department Pham Dinh Thuy called on industrial investment projectsto be sped up to improve production capacity, services with high added value tobe developed and domestic consumption stimulated.
Bui Quang Tin, CEO of BizLight Business School,suggested monetary policy be more flexible to fuel production activities andkeep the CPI stable.-VNA
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