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The GDP in the first quarter of 2017 grew by 5.1 percent, the lowest growth rate in the last three years.
The bad news has been attributed to the decline in the mining sector. Meanwhile, the cabinet’s representative said Vietnam is likely to exploit one million more ton of crude oil for export.
Can Van Luc, an economist, while confirming that the mining industry declined sharply in the first quarter, said the decline was intentionally planned.
The government planned to exploit 12.28 million tons of oil this year, a decrease of 3.1 million if compared with 2016. The exploited volume in Q1 2017 was lower by 600,000 tons than that of the same period last year.
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The government planned to exploit 12.28 million tons of oil this year, a decrease of 3.1 million if compared with 2016. The exploited volume in Q1 2017 was lower by 600,000 tons than that of the same period last year. |
There were other factors that affected the GDP, including slow disbursement for public investment, which only fulfilled 12.4 percent of the plan.
Meanwhile, retail and consumer services turnover, if not counting the price increases, grew by 6.2 percent only, lower than last year’s 7 percent growth rate.
According to Dang Duc Anh from NCIF, in Q2, if enterprises’ confidence continues to be stable despite the decline and difficulties in Q1, and if the decline in the mining sector is lower, the quarter’s GDP growth rate may reach 5.6 percent.
The industrial sector is believed to have the highest growth rate, at 6.3 percent, while agriculture and service sectors would see growth rates of 2.3 percent and 6.8 percent, respectively.
The scenario for economic growth in Q2 will occur if the mining sector does not witness a sharp decline as it saw in the first quarter.
“In 2015-2016, Vietnam had to exploit more crude oil to maintain the high GDP growth rate. With the current economic structure, Vietnam heavily depends on the state-owned economic sector, while state-owned enterprises are sluggish, and privately run enterprises are small,” Anh said.
Vietnam has been striving to have ‘more sustainable’ and ‘higher-quality’ economic growth, which means growth which does not heavily depend on mining and crude oil. However, once it reduces oil exploitation, the GDP growth rate would slow down.
An agency has estimated that if the oil exploitation volume in Q1 was equal to the same period last year, the GDP growth rate would be 5.95 percent.
According to PetroVietnam, the plan on crude oil exploitation in 2017 was submitted to the government in August 2016.
As the oil price is low in the world market, PetroVietnam would focus on developing potential mines to prepare for exploitation when the oil price bounces back.
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