Vietnam beats economic growth target

illustration photo

GDP rose 6.96 per cent in the fourth quarter compared to a year earlier, up against the 6.07 per cent gain in the third quarter, according to data released by the General Statistics Office (GSO) on December 27. For the whole year the economy grew by 5.98 per cent, beating the government’s 5.8 per cent target.

In October the State Bank (SBV) lowered the VND deposit rate ceiling for certain terms and has cut other rates as well as devalued the VND throughout the year to help boost the corporate sector. According to the GSO, exports from foreign companies in the country increased 15 per cent this year and disbursed foreign direct investment (FDI) rose 7 per cent.

“Growth was supported by exports, mainly from foreign companies,” said Tran Dinh Thien, director of the Vietnam Institute of Economics in Hanoi. “Signs of economic improvement are getting clearer, though growth might still be fragile.”

The government has taken steps to shake up the financial system and boost lending, with credit growth at 12.6 per cent as of December 22. Meanwhile, falling oil prices have helped ease inflation and the SBV said this week that it plans to keep the VND stable through to next year and pursue flexible monetary policies to boost expansion and curb price gains.

Exports grew 13.6 per cent last year as manufacturers including Samsung Electronics and LG Electronics boosted their investments in the country. Shipments from FDI companies, including crude oil, reached $101.6 billion, or 68 per cent of the total, reported the Foreign Investment Agency of the Ministry of Planning and Investment.

Inflation eased to 1.84 per cent in December from the previous year, its slowest pace since 2006. The government has ordered fuel retailers to cut tariffs and asked industries to stabilise prices before and during the Lunar New Year holiday in February.

Retail sales grew 10.6 per cent last year compared to 2013. Services rose 10 per cent, while manufacturing expanded 8.45 per cent.

“The economy has improved and businesses are getting better,” said Nguyen Bich Lam, head of the GSO, at a briefing. “The economy will continue to improve in 2015 as manufacturing, services and construction are strengthened further.”