The Hanoitimes - The macroeconomic report for the second quarter of 2017 released by the VEPR on July 10 shows that economic growth in the next two quarters of 2017 will be at 6.7% and 7% respectively, bringing the full year growth to 6.4%.
According to the report, many major economies in the world have shown signs of recovery. The US economy continues to growth strongly with positive signals from the labor market and the service sector. The decrease in inflation of the U.S market opens up a possibility for Fed to slow down the interest rate hikes. In Europe, the election results in France last April eased considerably the skepticism about political instability in the region.
Meanwhile, after the defeat in the early election, Great Britain is expected to face many difficulties in reviving the economy, particularly in the course of the upcoming Brexit talks. In Asia, the economic prospects of China, Japan and ASEAN nations are highly regarded while the Indian economy continues to decline.
Economic experts discussed at the meeting.
In that context, the economy in Vietnam in the second quarter showed signs of a positive recovery, with a growth rate of 6.17%, higher than that of the same period last year (5.78%). Generally, for the first six months, the economic growth was 5.73%, a slight increase over the same period of 2016.
According to Professor Nguyen Duc Thanh, The Director of the Vietnam Institute for Economic and Policy Research, the economy of the second quarter recovered strongly thanks to strong improvements in agriculture and services. Besides, except for mining, the remaining sectors in the industry-construction sector have seen positive growth, corresponding to the same period of 2016.
Industrial production indicators improved markedly in the quarter. In addition, the Vietnam Economic Performance Index (VEPI) also increased slightly to 6.0% in the second quarter. Newly established enterprises increase in both quantity and average registered capital. However, Professor Nguyen Duc Thanh also pointed out that the number of businesses temporarily suspended activities increased significantly along with the decline in the number of industrial workers and the total employment. As a result, the growth rates may not be derived from domestic market, but rely on some big Foreign Direct Investment (FDI) enterprises.
Inflation plunged in the second quarter while the Consumer Price Index (CPI) of June only reached 2.5% in comparison to that of the same period last year and 0.2% compared to 2016. Food prices fell sharply due to the oversupply of pork. Furthermore, the adjustments to decrease gasoline prices have largely offset most of impacts of public service price modifications. Meanwhile, the total means of payment of low growth made basic inflation continue to decline in the first half of this year.
International trade saw a rapid growth with exports and imports at 24,5% and 26,8% respectively in comparison with the previous year. The rise of export has contributed to a reduction in trade deficit. It is noteworthy that for the first time trade deficit between Vietnam and Korea (15.9 billion USD) has exceeded the deficit with China (14.1 billion USD).
The report also states a significant decrease in budget deficit during the past 6 months, reaching an approx. 32.5 trillion VND in comparison with 89.2 trillion VND of 2016. However, this result was due to a slow disbursement in public investment. Meanwhile, the increase of regular spending and debt payment has put pressure on budget balance, as well as funds allocated for investment development.
Besides, consumer spending in Vietnam has experienced a steady increase in both price and quantity in the second Quarter with the rate of 10,1% and 8,4% respectively year on year. Investment has slightly recovered, mainly due to the surge of registered FDI at 8.92 billion USD in the second Quarter.
At the same time, credit growth continued to be higher than mobilization growth leading to an increase in the gap in the second Quarter. However, low disbursement rate in public investment has caused a strong increase of deposits of the State Treasury in commercial banks, in turn relieving pressure of liquidity in the market and stabilize interest rates.
On the other hand, exchange and gold markets have been stabilized regardless of the World market fluctuation in the second Quarter.
In real estate market, number of transactions saw a decrease in compared with the same period of last year.
Khac Kien - kinhtedothi.vn