Lower fossil fuel output slows Vietnam's economy - govt

March 30, 2017 | 11:19 pm PT
Adverse weather and slower growth in the processing and manufacturing sectors have also been blamed for curbing first-quarter growth.

Falling production of crude oil, natural gas and coal is the main reason behind Vietnam's slowest first quarter economic growth in three years, a government official was quoted on Friday as saying.

The country's gross domestic product (GDP) from January-March rose an estimated 5.1 percent compared to the same period last year, the slowest pace to be recorded in the first quarter since 2014, when it rose 5.06 percent, the government's General Statistics Office (GSO) said on Wednesday.

"The biggest reason is that Vietnam is pushing economic reforms and switching its growth model from mainly exploiting natural resources to focusing on sectors that do not rely on exploitation," Ha Quang Tuyen, head of the GSO's National Accounts, told government online newspaper Bao Chinh Phu.

Vietnam has set a target of pumping only 12.28 million tons (247,000 barrels per day) of crude oil this year, down 19.2 percent from 2016.

During the first quarter, crude oil output fell 15 percent from the same period last year to an estimated 3.44 million tons; natural gas dropped 8.9 percent to 2.52 billion cubic meters and coal fell 5.6 percent to 9.69 million tons, government data showed.

"This trend is necessary for sustainable economic development," he said in an interview with the news site.

Drought and salination that hit rice production in the Mekong Delta last year and lower growth in the processing and manufacturing sectors have also contributed to slowing the economy, Tuyen said.

Vietnam’s economy is forecast to expand at an average of 6.3 percent from 2017-2019, "with all categories of demand buoyed by strong foreign direct investment and manufacturing exports", the World Bank said in a January report.

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