Vietnam posted a gross domestic growth (GDP) rate of 5.1% in the first quarter of 2017, signalling a slowdown compared to the first-quarter rates of 6.12% in 2015 and 5.48% in 2016.

Can Tho - the largest city in the Mekong Delta

General Director of the General Statistics Office (GSO) Nguyen Bich Lam revealed the information at a press conference in Hanoi on March 29.

He attributed the slower growth partly to the year-on-year growth of 2.03 percent in the agro-forestry-fishery sector. The sector’s growth is higher than the same period last year but still the second lowest rate since 2011.

The industry and construction sector increased by 4.17% from a year earlier, 2.99 percentage points lower than that in Q1 of 2016 and also the slowest pace since 2011, as the mining industry contracted by 10%.

Meanwhile, the services sector enjoyed the best performance since 2012 as it posted a 6.52% rise in the reviewed time, according to Director of the GSO’s National Account Department Ha Quang Tuyen.

Export turnover is estimated at US$43.7 billion in Q1, up 12.8% year on year, with big rises recorded in the shipments of electronic products, computers and components (42.3%); textile and garment (10.2%); machinery, equipment and spare parts (34.6%).

About VND80.5 trillion (US$3.54 billion) of foreign direct investment was registered in the three-month period through March.

Meanwhile, retail sales of goods and services totalled VND921.1 trillion (nearly US$40.53 billion), climbing 9.18% from the same period last year. The rate is 6.2% if price hikes are excluded, lower than the 7.5% expansion in Q1 of 2016, indicating slower growth in the economy’s aggregate demand and purchasing power, the GSO said.

This office added in the three months, 26,478 businesses were set up with a combined registered capital of nearly VND271.24 trillion (US$11.93 billion), up 11.4% in the company number and 45.8% in the capital year on year. Meanwhile, another 9,271 firms resumed operations.

General Director Lam forecast more difficulties and challenges, instead of favourable conditions, for the remaining months of 2017. It will be hard to achieve the targeted growth rate of 6.7% this year if the economy does not make breakthrough from now to the end of the year.

Therefore, the Government, sectors, authorities at all level, the business community, and the entire society must be proactive and flexible to overcome obstacles and realise the socio-economic development targets set by the National Assembly, he added.

Export growth beyond expectations in first quarter

Vietnam’s exports in the first three months of the year went beyond expectations with total export value estimated at US$43.03 billion, up 12.8% from the same time last year.

Phan Van Chinh, Director of the Import-Export Department under the Ministry of Industry and Trade, said the export turnover of the domestic sector grew by 12% while that of foreign-invested expanded by 13%.

Exports of agro-forestry-aquatic products enjoyed remarkable achievements when they went up by 12.2% and made up 12.5% of the total export revenue, higher than last year’s figure of 11%.

The manufacturing sector still kept its export growth trend, reaching 12.5%. Meanwhile, shipments of minerals and fuel saw recovery thanks to an increase in prices of oil and other goods.

However, the country splashed out US$45.03 billion on imports in the period, which led to a trade deficit of US$2 billion, or 4.4% of the total export revenue.

Chinh said that this was spurred by a plunge of US$828 million in export revenue of Samsung company, which dragged down growth of manufacturing product exports. In addition, the increased imports of materials for domestic production like computers, components and leather also contributed to the trade deficit.

Furthermore, the disbursement of US$3.6 billion by foreign-invested projects to purchase equipment and machines like Samsung Display project in Bac Ninh and fiber project in Binh Duong also affected the country’s import revenue.

Minister of Industry and Trade Tran Tuan Anh said that local enterprises should focus on diversifying export products to avoid dependence on key exports like mobile phones as their decreased turnover will have critical impacts on the total export revenue.

VNA