VietNamNet Bridge - Vietnam’s GDP in the first six months of the year reached a 5-year high, and inflation stood at a 10-year low. But the Minister of Planning and Investment Bui QuangVinh said the national economy’s growth was still at risk because of a high trade deficit with China and a petrol price increase.

This year is considered pivotal in the 2011-2015 socio-economic development plan. The high 6.28 percent GDP growth rate and the low 0.55 percent inflation increase in the first six months were ‘brighter-than-expected’ figures.

As such, experts believe that the 6.2 percent GDP and 5 percent inflation targets set earlier this year are within reach.

However, the Minister of Planning and Investment Bui QuangVinh still can see three unsolved problems of the national economy.

First, according to Vinh, agricultural production is on the decrease. In 2014, agricultural production made up 3.44 percent of GDP and 2.17 percent of GDP in the first half of 2015. This was attributed to a drought which led to a productivity decrease, and to a decrease in seafood (shrimp and catfish) exports.

“Agriculture is the pillar of the national economy which creates jobs and ensures social security. It is a worrying problem that agricultural production is decreasing, which needs further discussion,” Vinh said.

The second challenge is imports/exports. Vietnam exported more than it imported in the last three consecutive years, while it began seeing a trade deficit in the first six months of the year with a relatively high excess of imports over exports at $3.7 billion.

“The trade deficit is equal to 4.7 percent of export turnover, which is very close to the 5 percent target set for the year,” he said.

“If Vietnam continues importing more than exporting, the trade deficit will exceed the 5 percent threshold. This will cause an international payment imbalance and put pressure on the dong/dollar exchange rate,” he warned.

Vinh urged application of measures to boost exports and control imports, especially imports of non-essential luxury goods.

The third problem is that though manufacturing contributes to economic growth, it is mostly from foreign-invested enterprises. Though the foreign invested sector makes a great contribution, Vietnam should rely on its domestic economic sectors to develop.

As for inflation, Do Thi Ngoc from the General Department of Customs warned it is highly possible that petroleum prices would rise again towards the end of the year.

Vietnam exported $77.7 billion worth of commodities during the first half of 2015, a year-on-year increase of 9.3 percent.

Among key export commodities, telephones and components brought home $14.7 billion (up 27.1 percent), computers and components – $7.4 billion (up 60.4 percent), footwear –$5.9 billion (21.9 percent), and cashew nuts –$1.1 billion (28.4 percent).

Pham Huyen