Growth advancing in right direction

The General Statistics Office (GSO) has reported that almost all economic sectors of the economy have been gradually regaining their momentum for further growth since early this year.

For example, state-owned PetroVietnam last week reported that its total revenue in the first three months of the year is estimated to be over VND158 trillion ($6.87 billion), up 32 per cent on-year.

The group exploited 2.85 million tonnes of crude oil, up 5 per cent on-year, and produced 457,700 tonnes of nitrate, up 11 per cent. Its fertiliser sales grew 17 per cent, assorted fuel up 7 per cent, crude oil 5 per cent, condensate 357 per cent, and polypropylene by 3 per cent.

The situation can be seen clearer at Vietnam Electricity (EVN), which last week also reported that all of its activities have increased in Q1 of 2022 as compared to the same period last year.

Specifically, its gross output of industry is estimated to be VND88.83 trillion ($3.86 billion), up 7.15 per cent, while the produced and purchased electricity volume is nearly 60 million kilowatt-hours, up 7.4 per cent; and commercial electricity totalled nearly 54.47 million kWh, up 7.15 per cent. Electricity for agro-forestry-fishery climbed 7.73 per cent, while the rate is 3.34 per cent for construction and industrial activities, 13.6 per cent for households, and 1.55 per cent for trade and hotels.

EVN’s total revenues from electricity sales are estimated to be over VND101.4 trillion ($4.4 billion), up 9.26 per cent on-year.

Petrol and electricity are vital to production activities, especially manufacturing and processing, which create 80 per cent of Vietnam’s industrial growth. According to the GSO, in Q1 of this year, Vietnam’s industrial production continued to recover, with the whole sector’s added value increasing 7.07 per cent on-year – including an on-year rise of 7.79 per cent in manufacturing and processing, which creates 80 per cent of industrial growth.

“Production and distribution of electricity climbed 7.42 per cent on-year, while water supply and waste treatment and management ascended 6.54 per cent, and mining up 1.23 per cent on-year,” said the GSO in its report on the socioeconomic situation for Q1 released last week.

“All of these figures showed that the first-quarter economy has been strongly bouncing back and gaining growth momentum thanks to the country’s large-scale popularity of vaccination against the pandemic in addition to the domestic business and climate’s improvements – this has strengthened business confidence,” said Prime Minister Pham Minh Chinh.

The economy grew 5.03 per cent on-year in Q1, higher than the on-year rise of 4.72 and 3.66 per cent in the same periods of 2021 and 2020, respectively, the GSO reported.

In which the on-year growth rate was 2.45 per cent for the agro-forestry-fishery sector, 6.38 per cent for the construction and industrial sector, and 4.58 per cent for the service sector. These sectors created 5.76, 51.08, and 43.16 per cent of economic growth, respectively.

The government is expecting that with its opening of the skies, Vietnam will be able to boost its tourism industry and attract more foreign direct investment – the key pillars of economic growth. On March 15, the government lifted some mobility restrictions with a view to revitalising the tourism industry. It also issued granted a visa exemption of 15 days to citizens from 13 countries upon immigration to Vietnam. The policy will be applied until March 2025.

In 2019, the tourism industry created 9.2 per cent or $24.1 billion of GDP and expanded 22.7 per cent during the 2015-2019 period.

Vietnam also lifted restrictions on frequency of regular international flights from February, making it easier for investors to enter Vietnam and implement projects.

The GSO reported that in Q1, total disbursement of foreign investment is estimated to be $4.42 billion, up 7.8 per cent on-year – the highest 3-month disbursement level over the past five years.

According to global data analyst FocusEconomics, Vietnam’s GDP is set to grow at the fastest rate in the region this year, following 2021’s relatively weak expansion.