Jun 29, 2020 / 11:17

Vietnam H1 GDP growth drops to decade-low on Covid-19

The Hanoitimes - Manufacturing and processing remained the driving force of the economy in the first six months with an expansion of 4.96% year-on-year.

Vietnam’s GDP has expanded 1.81% year-on-year in the first half of 2020, the lowest six-month growth rate in the past 10 years, dragged down by the growing impacts of the Covid-19 pandemic and global uncertainties, the General Statistics Office (GSO) has announced.

 Data: GSO. Chart: Ngoc Thuy. 

In the second quarter, the country’s GDP growth is also estimated at a 10-year low of 0.36%.

Duong Manh Hung, director of the GSO’s System of National Accounts Department, told VnExpress the country’s GDP growth of 1.81% in the first half of the year was even lower than GSO’s least optimistic growth scenario.

As the government prioritizes the fight against the pandemic to economic growth, a positive economic growth rate in the January – June period indicates strong efforts of both the government and the whole society to maintain business operations while combating Covid-19, said the GSO in a quarterly report released Monday.

In the January – June period, the sector of agriculture, forestry and fishery increased by 1.19%, contributing 11.89% to the overall growth; the sector of industry and construction rose by 2.98%, contributing 73.14%; and the service sector climbed by 0.57%, contributing 14.97%.

In the industry and construction sector, the industry expanded 5.28% year-on-year in the second, significantly lower than the 10.45% growth rate of Q1/2019 and contributing 1.89 percentage points to the overall growth.

Manufacturing and processing remained the driving force of the economy in the first six months with an expansion of 4.96%, along with whole sale and retail with a growth rate of 4.3%, finance – banking and insurance with 6.78%.

Regarding the structure of the economy during the first half of the year, the sector of agriculture, forestry and fishery made up 14.16%; the sector of industry and construction accounted for 33.44%; the service sector represented 42.04%; and product taxes less subsidies on production accounted for 10.36%.

In terms of GDP use during this period, the final consumption rose by 0.69% against the same period of last year; accumulated assets grew by 1.93%; trade balance of goods and services shrank by 2.23%.

The growth target of 6.8% for this year, thus, has become unrealistic in this current crisis, which would required growth rates of over 10% in the last two quarters, Hung from GSO commented.

The International Monetary Fund (IMF) has forecast Vietnam's economy to grow 2.7% this year, the highest in Asia.