Vietnam’s growth target slowly slipping away

By Minh Son   June 29, 2017 | 11:20 am GMT+7

The country has a lot to do if it wants to hit the government's growth target of 6.7 percent this year.

Vietnam’s gross domestic product (GDP) is expected to expand by 5.73 percent on-year in the first half of 2017, a long way short of the government's target of 6.7 percent for 2017, said the General Statistics Office.

In Q2, the country’s GDP rose 6.17 percent, higher than the 5.1 percent posted in the Q1.

However, the Q2 figure remains lower than previous estimates made in May by Mai Tien Dung, Minister-Chairman of the Government Office. Dung said Vietnam would need to hit GDP growth in Q2, Q3 and Q4 of 6.26 percent, 7.29 percent and 7.49 percent, respectively, in order to hit the annual target.

For the first six months, the service sector is likely to post five-year-high growth of 6.85 percent, contributing 2.59 percentage points to GDP.

The agro-forestry-fishery sector is estimated to expand 2.65 percent, contributing 0.43 percentage points, while the industry and construction sector is projected to rise by 5.81 percent, contributing 2 percentage points to GDP.

These figures are still below targets set by Prime Minister Nguyen Xuan Phuc, who has continued to show his determination to reach the 2017 target.

The agro-forestry-fishery sector has been urged to expand by 3.05 percent and earn over $33 billion from exports, while the industry and construction sector needs to hit 7.91 percent growth to make the national target a reality.

The country is also hoping to see a 30 percent jump in the number of foreign arrivals, while the national oil and gas group (PetroVietnam) has been told to pump an extra one million tons of oil this year to help realize the goal.

In the first six months of last year, Vietnam's GDP grew 5.52 percent, with increases of 5.48 percent in Q1 and 5.55 percent in Q2.

The country’s economic growth hit 6.21 percent in 2016, lower than the target of 6.7 percent. Vietnam attributed the shortfall to a drop in mining, climate-affected agriculture, an environmental incident that caused mass fish deaths in central provinces and fluctuations in global prices. These factors were also to blame for the export sector failing to hit its goal of 10 percent growth last year.