Despite concerns over the negative impact of the world oil price plunge, gross domestic product (GDP) growth last year and in the first quarter was higher than targeted.

Last year’s GDP expansion was 5.98%, well above the 5.42% in 2013 and the 5.25% in 2012, according to the Government’s updated report on 2014 socio-economic development presented by Deputy Prime Minister Nguyen Xuan Phuc at the opening of the ninth session of the 13th National Assembly (NA) in Hanoi yesterday.

There were grave concerns that declining oil prices on global markets would hit budget collections, exports and the country’s economic growth. But budget revenue was still ensured that year.

According to the Government’s report, revenue from crude oil reached VND100 trillion last year, or VND14.88 trillion (17.5%) higher than the target but nearly VND7 trillion lower than the figure reported to the NA. The reason was the world oil price dropped sharply in the final quarter of last year and Vietnam’s oil extractions fell to 14.44 million tons. 

To ensure budget revenue was VND80.82 trillion higher targeted and VND17 trillion higher than the figure reported to the NA, the Government collected more taxes and fees from domestic sources as well as exports and imports.

Despite the oil price decline from last October, GDP growth in the first quarter of this year was 6.03%, the highest in five years, according to the Government.

According to Minister of Planning and Investment Bui Quang Vinh, revenue from crude oil in the first four months dropped 32.6% year-on-year as the world crude oil price fell to US$58.3 per barrel but total budget collections still increased 9.4% versus a year earlier to VND314 trillion.

Last year, the Government realized and beat 13 of 14 targets. The consumer price index edged up a mere 1.84% and the country enjoyed a trade surplus of US$2.1 billion, according to Vietnam News Agency. 

However, the NA Economic Committee was concerned about the sustainability of GDP growth last year and the previous quarter due to the impact of lower oil prices.

Strong GDP growth in quarter one could be ascribed to manufacturing, processing and mining (coal and crude oil) sectors. Meanwhile, the agricultural, forestry and fishery sector posted growth of a mere 2.14% compared to 2.68% in the same period last year.