Difficulties ahead for Việt Nam to achieve this year's economic growth: GSO head

July 05, 2021 - 08:00
General director of the General Statistics Office (GSO) Nguyễn Thị Hương spoke to Vietnam News Agency about the difficulties ahead in the second half of this year as the country pursues its twin goals to effectively prevent and control COVID-19 and maintain socio-economic development.


General director of the General Statistics Office (GSO) Nguyễn Thị Hương/ VNA/VNS Photo Danh Lam

General director of the General Statistics Office (GSO) Nguyễn Thị Hương spoke to Vietnam News Agency about the difficulties ahead in the second half of this year as the country pursues its twin goals to effectively prevent and control COVID-19 and maintain socio-economic development.

What are the major achievements and difficulties that Việt Nam’s economy witnessed in the first half of this year?

Maintaining the positive results Việt Nam’s economy made last year and the country’s macroeconomy remained stable in the first half of this year. Its trade and production activities also generated good results.

However, the resurgence of the COVID-19 pandemic since late April in major localities posed challenges for Việt Nam in managing its economy and ensuring social security.

In the first half of this year, Việt Nam’s Gross Domestic Products (GDP) increased 5.64 per cent, higher than that of the same period in 2020 (1.82 per cent) but lower than 2018 and 2019 (7.05 per cent and 6.77 per cent respectively). 

Agriculture, forestry and fishery production saw a growth rate of 3.82 per cent, contributing 8.1 per cent to the national GDP while industrial production and construction gained growth of 8.36 per cent and the service sector 3.96 per cent.

Increased rice production in the winter-spring crop, stable livestock and aquaculture production and increased production of farming products contributed to the positive growth.

Meanwhile, industrial production in the second quarter of 2021 grew quite strongly thanks to the recovered trade and production of enterprises. 

In the first six months of this year, Việt Nam’s export revenue reached US$157.63 billion, marking an increase of 28.4 per cent compared with 2020.

The consumer price index (CPI) increased by 1.47 per cent during the first half of the year, the lowest rise since 2016; inflation during the period increased by 0.87 per cent.

Notably, the country reported an increase in the number of new enterprises and registered capital, which reflects continuous efforts and start-up spirit among the business community.

However, besides such positive results, Việt Nam’s economy faced challenges and shortcomings. In agriculture, diseases in pigs and cows developed and animal feed prices kept rising since late last year. In the construction sector, increasing prices of materials affected State-funded works.

Due to the outbreaks of COVID-19, many enterprises had to halt operations or close, particularly small-sized enterprises.

Passenger transportation was hit hard as localities imposed social distancing.

For the last three months, Việt Nam’s trade deficit reached $1 billion, making the trade deficit in the first half of this year stay at $5.86 billion. The import of consumer goods worth US$ 9.78 billion, accounting for 6.1 per cent of the total value of imports, could reduce the competitiveness of domestic goods, making it more difficult for domestic goods to consume, affecting domestic production and consumption.

Recently, the prices of raw materials in some industries increased sharply. Major economies in the world implemented loosening monetary policies to stimulate economic growth. Do you think such moves could affect Việt Nam's inflation control?

Seeing pricing changes in the first half of this year, we identified some factors which could possibly affect Việt Nam’s inflation in the remainder of this year. The global economy is recovering after countries rolled out COVID-19 vaccination drives, which would increase demand for goods and services and as a result, pushing prices up and adding pressure on inflation control of the whole year.

Prices of fuels and raw materials in industries increased across the world. Consequently, import prices of such fuels/materials would go up and production costs would increase too. As a result, prices of products would be higher.

As of June 26, 2021, the average Brent oil price in the first six months of 2021 was about $64.99 per barrel, an increase of nearly 29.5 per cent compared with that of December 2020 and 68.1 per cent higher than that of the same period last year.

According to forecasts by international organisations, Brent oil price in 2021 is about $65 per barrel on average, about 55 per cent higher than that of 2020. So, domestic petroleum and oil prices could increase by 35 per cent and of course, affect the CPI.

Other countries continue implementing loosening monetary policies, possibly causing demand-pull inflation and prices of essential goods could be pushed up 

Adjustments in prices of services that the Government oversees like medical and education services would also affect this year’s CPI. I think that without extreme shocks, Việt Nam could likely keep this year’s inflation rate under four per cent.

What about other socio-economic goals? Do you think Việt Nam could achieve the goals set for this year?

Việt Nam was still facing a lot of challenges and difficulties when entering the third quarter of this year, especially when the country is closely connected with the global economy which is more and more unpredicted and complicated.

Although countries are rolling out their COVID-19 vaccination, the difference in vaccination rates among countries and regions leads to uneven recoveries. This could disrupt global supply chains, affecting trade, tourism, transportation, increasing unemployment and leaving negative impacts on social security.

So, Việt Nam will still face difficulties in the coming months. To achieve its twin goals, joint efforts by the Government, enterprises and people are needed.

The General Statistic Office will keep updating socio-economic development as well as growth scenario so that the Government, ministries, agencies and localities can be timely informed and take measures.

Việt Nam’s National Assembly approved a government-proposed socio-economic plan for 2021, under which the local economy would grow 6 per cent this year. Do you have any recommendations to achieve that economic growth?

To achieve the yearly growth of 6 per cent, the country has to get a higher growth rate in the second half of this year.

The rate is quite ambitious as the fourth wave of COVID-19 pandemic is still complicated in localities, particularly in economic and manufacturing hubs.

To overcome difficulties and achieve planned growth, systematic and comprehensive measures are needed. First of all, we have to continue to take drastic disease prevention and control measures. Fighting against COVID-19 is like the fight against the enemy. Strictly follow the Health Ministry’s 5K message – khẩu trang (face masks), khử khuẩn (disinfection), khỏang cách (distancing), không tụ tập (no gatherings), and khai báo y tế (health declarations) plus vaccination and boost technological applications in disease prevention and control.

Localities should take advantage of online trade to boost consumption of farming products and commodities. It’s a fact that the COVID-19 pandemic hit hard many businesses but created an engine force for online trade to develop and replace conventional trade.

Ministries and agencies must develop policies to speed up digital transformation and help farmers and consumers better understand online trade. Authorities should also launch programmes to support farmers in COVID-19-hit areas in farming product consumption.

Relevant agencies must take strong actions to control and help stabilise animal feed prices.

Support to people and enterprises must be given as soon as possible, especially to workers who lost jobs in industrial zones. The Government and localities should pay more attention to help enterprises overcome difficulties, for example, simplifying procedures for them to access supports easily and quickly.

Solving difficulties in public investment is also a measure to boost economic growth.

At the same time, the Government still has to keep the macroeconomy stable and make inflation under control. Financial policies must be flexible and practical, which would help push growth and control inflation. Việt Nam should further boost exports and take advantage of signed free trade agreements. VNS