According to Head of the General Statistics Office of Vietnam Nguyen Bich Lam, the contraction was led by the global economic slowdown and the reduction in the country’s agriculture output during the period.
The GDP for the agro-forestry-fishery sector slipped 0.18 percent, compared to the 2.16 percent growth in 2015, the first time ever the sector witnessed a downturn due to the impacts of the cold spell in the north and the prolonged drought and saltwater intrusion in the south, Lam noted. The first half of this year saw winter-spring rice output fall by 6.4 percent to only 19.4 million tonnes, which was mainly responsible for the drop in total agricultural production. The GDP in the industry and construction sector rose by 6.82 percent, lower than the 9.66 percent increase of the same period last year, as the mining industry slid 2.2 percent.
Director of the General Statistics Office of Vietnam’s Industrial Statistics Department Pham Dinh Thuy warned that the mining industry, which is suffering from the imminent exhaustion of mineral reserves, will continue its downturn in the following years. Falling global oil prices also have had huge effects on the industry as the price of crude oil crashed to its 13-year low to below 27 USD per barrel on January 20 this year. Meanwhile, the service sector hit the highest growth rate of 6.35 percent since 2012 with wholesale and retailing up over 8 percent; banking, finance and insurance up 6 percent; and real estate services up 3.77 percent, a five-year high.
Vietnam needs its GDP to expand by 7.6 percent in the remaining months for the goal of a 6.7 percent GDP growth in 2016 to be met, Lam said. The General Statistics Office of Vietnam asked the government, the Ministry of Agriculture and Rural Development and local authorities to urgently take measures to recover the agro-forestry-fishery sector and provide support for areas affected by drought, saline intrusion and pollution. The office also proposed that the government focuses its effort to further develop supporting and processing industries and give a boost to high value-added service industries, such as tourism, telecommunication, information technology and finance & banking.
The government should speed up the disbursement of foreign direct investment (FDI) and official development assistance (ODA) to stimulate the country’s economic growth, while private investors should be encouraged to invest in infrastructure projects under the public-private partnership (PPP) scheme, it suggested. The General Statistics Office of Vietnam said more effort should be made to improve the local business climate and enhance national competitiveness, stressing that enterprises should be the economic engine of growth.
