VN economy faces tough future

July, 05/2016 - 11:00

Việt Nam’s economic growth in 2016 will be affected by many factors. General Director of the Việt Nam Statistics Office, Nguyễn Bích Lâm, speaks to business news website BNEWS

General Director of the Việt Nam Statistics Office, Nguyễn Bích Lâm

What is your assessment of Việt Nam’s economic development in the first six months of 2016?

The first six months of this year has seen both positive and negative aspects for our national economy. For example, indicators in the industrial production and service sectors were on the rise, while the lending interest rate experienced a tendency to decline. Meanwhile, the exchange rates between the Vietnamese đồng and other foreign currencies were stable, and foreign direct investment (FDI) showed many positive signs, particularly from Japan, South Korea and Taiwan.

Among the bright spots in the national economy in the period under review, I should mention the real estate and the FDI sectors.

In the first six months, more than 1,000 new projects were granted licenses. This figure was much larger than in the same period of 2015. In my opinion, the increase in FDI projects will help Vietnamese enterprises to expand their markets and our national economy’s competitiveness, as well as attract more investment capital for development.

Social investment capital in the first six months of 2016 reached VNĐ 618.2 trillion (US$27.71 billion), an increase of 11.7 percent compared with the same period last year, or equal to 32.9 percent of GDP.

However, the increase in the Consumer Price Index (CPI) in the first six months was only 1.72 percent compared with the same period last year.

Generally speaking, our country’s socio-economic situation is still facing many difficulties and challenges, particularly in the sectors of agro-forestry and fishery; mineral extraction; transportation; and real estate.

Do you think that the economic growth rate of 6.7 percent in 2016 is achievable?

Our GDP for the first six months is likely lower than it was projected. That means it will impact on the economic growth rate for the whole year of 2016.

To achieve the 6.7 percent GDP growth rate we have to increase production. In other words, the government, ministries and sectors, as well as localities have to focus their efforts on improving the business environment and the nation’s competitive edge.

What’s more important, we should focus on the implementation of the Prime Minister’s Decision 339/QĐ-TTG on February 19, 2013, on improving the effectiveness and competition of the national economy while speeding up the process of equitisation of State owned enterprises.

For the agriculture sector – Việt Nam’s primary industry – the Ministry of Agriculture and Rural Development should launch a study on the expansion of areas put under for the Summer-Autumn crop to compensate for the losses occurred in the previous Winter-Spring crop, while recommending that farmers restructure their crops and animal breeds to respond to the harsh weather and to cope with the negative impacts of climate change.

Last but not least, all ministries, central and local governments should speed up the process of implementing and disbursing public investment funds in line with the 2016 budget plan, including the FDI and ODA. In the meantime, all agencies nation-wide have to make efforts to pull in bad debts to within a safety thresh-hold.

How do you evaluate the country’s 2016 economic perspectives?

If we want to achieve the National Assembly’s GDP target of 6.7 percent, it is essential that in the 2nd half of 2016 we achieve a very high economic growth rate. This is a big challenge as many difficulties are still lying ahead.

In my opinion, to achieve a 6.7 percent growth rate, both central and local governments have to adopt more pro-active measures. Of course, if we fail in achieving this target, somehow it will affect the country’s 2016-2020 socio-economic development plan, but I don’t think it is a big deal.

For the next four years (2017-2020), if things go smoothly, difficulties are handled properly, the government’s economic measures are well implemented, and in the background all the Free Trade Agreements that Việt Nam is a signatory to come into force, and the world economy is restored to normal, I’m confident that this will have a positive impact on our national economic growth. — VNS