High exports drive growth

Vice Minister of Planning and Investment (MPI) Cao Viet Sinh said in a regular economic review meeting last week that the nation’s economic growth may reach 8.4 - 8.5 per cent, surpassing the annual target of 8.1 - 8.2 per cent for the year.
“The forecast figures are absolutely within reach based on the beautiful performance of related economic indicators in the first nine months of the year,” Sinh said.
The nine-month economic reports released by the MPI show that Vietnam’s economic growth was estimated at 7.8 per cent while growth indicators for the nation’s industrial production and export turnover were 16.8 per and 24.2 per cent respectively over the same period last year.
Sinh pointed out that achievements in the export sector were the most remarkable since the nine-month growth had already exceeded the whole year’s targets of an estimated 17-18 per cent. MPI figures show that the nation’s export earnings reached $29.9 billion between January and September thanks to increases in exports of the most strategic commodities, including coal, pepper, rubber latex, garments and textile, wooden furniture, footwear and aquatic products.
However, crude oil, rice and coffee exports have experienced a slight decline during the first nine months of the year because exporters intended to store the commodities so as to wait for the world prices to go up, according to the reports.
“Apart from positive performances of other sectors, we are really concerned about the slow-down in agricultural and fishery growth because the sectors have to suffer from natural disasters and market pricing crisis,” Sinh said.
Between January and September, the agricultural and fisheries sector reached a growth of 3.4 per cent compared to 3.8 per cent as planned in the beginning of the year. Analysts said that the slowdown in agricultural production resulted from animal diseases, including bird flu, and bad weather, which hit fisheries hard, mostly in the south.
Another concern affecting whether or not the 8.4 - 8.5 per cent economic growth is within reach, according to Sinh, is the immediate changes in the consumer price index when the new government decision to raise minimum salaries for state workers comes into effect this month.
“We are afraid that rises of state workers’ salaries will create a ‘domino’ effect and prices of all consumer commodities will immediately rise,” Sinh said.
Figures show that the consumer price index increased by 5.1 per cent since last December. However, such a rise was much lower than the level of 7.1 per cent during the first nine months of last year.



No. 781/October 2-8, 2006