Vietnam's GDP growth slowdowns amid severe Mekong drought

By Lam Le   March 25, 2016 | 03:58 am PT
Vietnam's GDP grew by 5.64 percent in the first quarter of 2016, a slow down compared to the same period last year when it rose 6.12 percent, announced the General Statistics Office today.

Source: General Statistics Office

Agriculture recorded negative growth of 2.69 percent due to extreme cold in the North and drought in the South. Estimates show that rice output in the Mekong Delta fell by 6.2 percent (700 thousand tons) compared to Q1/2015, and the winter crop in the North was unproductive. Only the forestry and fisheries sectors experienced growth, rising 6.24 percent and 2.12 percent respectively.

Industrial and construction output was up 6.72 percent, a much smaller increase than the 8.74 percent recorded in 2015, but still higher than 2013 and 2014.

Industry only grew by 6.2 percent (significantly lower than 9.87 percent in Q1/2015) because extraction, processing and manufacturing experienced a significant slowdown. Value added from extraction fell 1.2 percent due to crude oil output falling 3.7 percent compared to Q1/2015. Meanwhile, processing and manufacturing only grew by 7.9 percent compared to 9.7 percent during the same period last year.

Construction alone in the first three months of 2016 experienced impressive growth of 9.94 percent, the highest since 2010. The greatest increase was recorded in the private sector, which saw a 23 percent increase in output value. Public sector construction saw an 11 percent rise in output value while FDI and other construction experienced negative growth.

Services grew by 6.13 percent, the biggest jump since Q1/2012.

Vietnam experienced a trade surplus amid slow growth globally. Imports fell sharply by 4.8 percent compared to Q1/2015 as demand fell for high value machinery and equipment by 14 percent and oil based products by 41.6 percent. Exports rose slowly with value increasing by only 4.1 percent, while crude oil exports, the state budget's main revenue source, fell by a massive 52.8 percent.

The real estate sector experienced its highest growth since 2012. There are signs that the market is heating up with an increased number of successful transactions, and apartment and land prices rising slightly. Favorable interest rates, flexible mortgage terms and support policies have contributed to this rise.

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