Multi-dimensional message from Vietnam’s economy in first quarter

Tuesday, 2019-04-09 18:07:39
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Vietnam's GDP growth reached 6.79% in the first quarter of this year. (Illustrative image)
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NDO - In the context of decline in both trade and growth as well as increase of financial - monetary challenges, oil prices and technical protection barriers in the world in 2019, Vietnam’s economic picture in the first quarter showed remarkable multi-dimensional messages.

Vietnam's GDP growth of 6.79% in the first quarter of this year was the result and convincing evidence of drastic and positive reforms of the country in recent times.

Economic structure has been improved with the proportion of the agricultural sector reduced to 10.16% of GDP. The structure of new varieties with higher quality has been strongly increased, while many closed agricultural chains have been formed, from production to harvesting, preservation and processing stages, with advanced, higher and cleaner technology. Many products have had deep processing contents, attached national brands and received official export contracts and achieved higher socio-economic efficiency. The domestic market continues to be a positive driving force with controlled inflation and total revenues of retail sales and consumer services up 12%.

The foreign economy has seen prosperities with over 4.5 million international visitors to the country, up 7% over the same period last year. Accordingly, arrivals from all continents as well as by road and air have increased. The total newly registered and additional FDI capital reached US$5.119 billion, up 30.9%. The implemented FDI is expected to reach US$4.12 billion (up 6.2%), and the total capital contribution was US$5.69 billion, three times higher than the same period in 2018. These figures proved that the attraction of the M&A (merger and acquisition) and equitisation market in Vietnam has been improved along with new expectations about Vietnam – US economic relations as well as new opportunities and challenges from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the upcoming EU-Vietnam Free Trade Agreement (EVFTA).

A positive message also came from the business sector, with a sharp rise in the number of enterprises returning to operations (a year-on-year increase of 78.1%), newly registered capital (up 34.8%), additional capital (double the new registered capital), and newly created jobs (up 40.9%).

In particular, the tendency towards the increase of new generation FDI projects with high technology and feasibility from the US into the management of aviation services and production of thousands of high-end commercial aircraft components and spare parts for export to the US and Europe has opened up a new period for the formation of a new international supply chain in the supporting industry in the country.

In addition, dozens of Vietnamese startup projects have successfully attracted millions of US dollars, expanded their markets and won many international awards. All achievements will contribute to forming a new look and position for the Vietnamese economy in international market in the near future.

During the first quarter of this year, new challenges for the country’s economy have emerged, including the increase of inflation pressure, the expansion of diseases in the livestock industry, the slow growth of export turnover and the decline in export turnover of several key agricultural products. In addition, the total number of dissolved and temporarily suspended enterprises is higher than those resuming operations, which showed that the business sector is facing numerous difficulties.

The message from the country’s economy in the first quarter highlighted the determination and direction of the Government, as well as the joint efforts from all people. Agencies and localities should not be subjective with the achievements but make more efforts to promote the creation and accelerate drastic actions to gain better results in 2019, while renovating their methods and upholding their responsibility, discipline, integrity and transparency. It is crucial to set and actively manage suitable growth scenarios for each sector and field. The services supporting enterprises, particularly administrative procedures related to land, tax and customs, should be practically improved. Localities should not neglect pressing social issues, while enhancing economic development, as well as strengthen the inspection of food safety and limit the lack of works to avoid the disruption of production and business activities.