PM's verdict on Q1 in Vietnam: Record growth, risks remain

By Dat Nguyen   April 2, 2018 | 05:31 pm PT
PM's verdict on Q1 in Vietnam: Record growth, risks remain
A worker checks copper rods at a cable factory in Hai Duong Province outside Hanoi, Vietnam. Photo by Reuters/Kham
The figures are stacking up nicely, but challenges face the private sector. 

Vietnam’s GDP growth of 7.38 percent in the first quarter of 2018 was highlighted by the country's prime minister as a great economic achievement.

GDP growth has reached a 10-year high thanks to impressive growth in the processing and manufacturing (14 percent), industry and construction (9.7 percent) and agricultural (4 percent) sectors, PM Nguyen Xuan Phuc told ministers and officials at a monthly government meeting on Monday.

Inflation has been kept under control, and Vietnam’s Consumer Price Index (CPI) in the first quarter rose by 2.66 percent over the same period last year. Total retail sales of goods and services also increased 9.9 percent, compared to a 6.4 percent jump last year, Phuc said.

"Nikkei has just announced this morning that Vietnam's Purchasing Managers' Index (PMI) in March reached 51.6 points. Although this figure is down from February, it still leaves Vietnam as one of the two countries in Southeast Asia standing over 50 points,” said the PM.

Vietnam’s export value reached $54.31 billion in the first three months, creating a trade surplus of $1.3 billion, the PM added.

The business environment is continuing to improve, Phuc said, citing the Provincial Competitiveness Index (PCI) 2017 report released on March 22 by the Vietnam Chamber of Commerce and Industry, and stocks on the VN-Index have surpassed a 10-year high, reflecting investor confidence in Vietnam.

He also mentioned the fact that 4.2 million foreigners visited Vietnam in the first quarter, up 31 percent from a year ago.

However, Phuc also pointed out the issues the country is facing, such as a slowing number of new businesses and a high number of private enterprises experiencing development difficulties.

"We need to analyze and clarify the causes and find solutions to promote the development of enterprises, especially in innovation. We need to consider what policy reforms are needed in terms of taxes, fees, credit and land," said the PM.

Although CPI in the first quarter only rose slightly, Phuc warned that inflation could increase due to the fact global prices of crude oil and basic commodities are increasing, he explained.

“We cannot be careless when it comes to inflation,” the PM said.

Phuc also mentioned traffic and fire safety, and demanded strategies from the Ministry of Transport and Ministry of Public Security to prevent tragedies such as the Carina Plaza fire in Ho Chi Minh City, which killed 13 people, from happening again.

The PM concluded by encouraging all ministries to boost the country's development. "This year, our GDP growth target assigned by congress is from 6.5 to 6.7 percent, but we should strive to reach at least 6.7 percent.”

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