The warning was made by general director of the General Statistics Office (GSO) Nguyen Bich Lam at a recent conference to announce Vietnam's socio-economic statistics for the first six months of this year.
Growth of the manufacturing sector slowed down to 10.1% in Q2.
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It said impressive growth was seen in the agriculture, fishery, processing and manufacturing and service sectors, and exports continued to be a driving force for the nation's economic development.
However, Lam noted, despite a 7.08% expansion in the first half of this year, the highest for the period since 2011, the GDP only grew 6.79% in the second quarter compared to 7.45% in the first quarter.
Therefore, growth in the third and fourth quarters is likely to be lower than the pace in the first half of 2018, Lam noted, adding that the GSO already forecast this at the beginning of the year.
Lam attributed the problem to growth slowdown in the industrial sector in the wake of a decline in the mining industry due to unfavorable weather conditions. The mining industry contracted by 1.3% in the first half of this year.
The country's index of industrial production saw a downward trend in the first half of this year as it increased by 12.9% in the first quarter and then slowed down to only 8.4% in the second quarter. Likewise, the processing and manufacturing sector, which accounted for over 80% of the whole industry, increased 15.7% in Q1 and 10.1% in Q2.
The processing and manufacturing industry is also forecast to reduce in the second half of this year due to the slowdown in the production of electronic and optical products and components.
According to Lam, Samsung Electronics Vietnam is expected to launch new products in the remaining months of this year, however, due to the too high growth rate gained in the second half of 2017, it will take the group difficult to overpass the rate in H2 this year.
More challenges ahead
Do Thi Ngoc, director of the GSO's Price Statistics Department, said there are risks of surging inflation in the next six months when the consumer price index (CPI) in the first half hiked 3.29% year-on-year - the fastest pace in seven years.
Meanwhile, trade deficit has returned in the last two months, raising a warning about export decline or import increase of the economy.
Another worrying problem lies with the private sector, with more than 52,800 companies having halted operations in the reviewed period, up 39.2% from a year earlier, while over 6,600 others completed bankruptcy procedures, up 21.8%.
According to Lam, to keep inflation under 4% this year as targeted by the National Assembly, prices of goods and medical and educational services, among others, should not be raised simultaneously.
He noted it is necessary to provide loans for priority fields like small- and medium-sized enterprises and exporting companies, continue to improve the business climate, and strongly develop the processing and manufacturing of agricultural products and consumer goods. There is also a need to soon put industrial investment projects into operation to boost production capacity.
Each sector and locality needs to closely follow its own growth plan to make appropriate and timely solutions to remove obstacles and facilitate production and business activities, Lam added.
