Vietnam’s economic growth is expected to hit 7.7-8 per cent in the second half of this year despite June’s record high consumer price index. The economy is projected to expand by 7.5 per cent over the entire year, given that GDP recorded around 7 per cent growth in the first six months, according to the Ministry of Planning and Investment (MPI).
MPI Minister Vo Hong Phuc said the economic development plan in the last six months of this year was “ambitious but achievable”.
“I think that we can achieve this growth rate due to the spectacular development of the industrial and service sectors,” Phuc told a national conference on planning and investment held in Hanoi last week.
Phuc said industrial and service sector values were expected to increase by 15.5 per cent and 8 per cent in the second half of this year compared to the same period last year.
The industrial growth rate was 15.4 per cent in the first six months.
“As usual, high industrial growth was largely due to the contribution of foreign-invested enterprises and the private domestic sector,” Phuc said.
Phuc, however, admitted there were many factors that could have a negative impact on development.
“The consumer price index is forecast to reach a record high level of 8-9 per cent. This is a big challenge for economic development.
“Meanwhile, the slow pace of administrative reform and an expected import surplus of $5 billion this year are also major problems,” Phuc said.
According to the MPI report, export turnover reached $11.7 billion while import revenues were $14 billion in the first half of this year, an increase of nearly 20 per cent and 14 per cent, respectively, compared to the same period last year.
MPI projected export and import turnover this year would be $23 billion and $28 billion, an increase of 14 per cent and 11 per cent, compared to last year.
Investment capital disbursed in the first six months of 2004 was estimated at VND115.4 trillion ($7.4 billion), equal to 36 per cent of GDP. Meanwhile, the whole year’s figure was projected to be VND249 trillion ($15.96 billion).
Around $750 million in official development assistance loans (just loans - or grants and loans?) were disbursed, equal to 38 per cent of the year’s plan.
Phuc said although Vietnam reached the ODA disbursement rate equal to that of the rest of the region, the figure for the first six months was moderate because of ODA project delays.
“I visited several national infrastructure development projects and found that they were being deployed at very slow pace because of land clearance and compensation,” he said.
Operation licences were granted for 259 new foreign invested projects with total registered capital of $755 million, while 95 operational projects increased their capital by $711 million.
More than $1.45 billion was estimated to be disbursed by foreign invested enterprises, an increase of 16 per cent compared to the same period last year.
Phuc said the number of new FDI projects was smaller than expected and would affect development.