Eventhough the world economy continues to maintain moderate, in the first 6 months of year 2015, Vietnam’s economy remained stable with some remarkable achievements: Domestic production improvements, positive growth trend, and stable macroeconomic balances.
Growth rate of domestic products
Total domestic product (GDP) in the first 6 months of 2015 increased by 6.28% compare with the same period of 2014 with the increase of 6.08% in the first quarter and 6.44% in the second quarter. This is the highest growth rate compared with the recent years (2013: 4.9%, 2014: 5.22%). In the total increase of 6.28%: the agriculture, forestry and fishing rose 2.36%, contributing 0.42 percent; industrial and construction areas increased 9.09% contributing 2.98 percent; service sector increased 5.90%, contributing 2.22 percent.
In the area of agriculture, forestry and fisheries: forestry sector reached 8.07% the highest growth compared with the same period of 2014, contributing 0.05 percent to the overall increase; agricultural sector increased 1.90%, contributing 0.27 percent; fisheries rose 3.30%, contributing 0.10 percent to the whole.
Industrial sector rose 9.53% over the same period last year, in which the processing industry, manufacturing grew by 9.95%, contributing significantly to the whole economy (contributing 1.57%). The construction sector rose 6.60%, higher than the 6.11% of the same period in 2014.
In the service sector: wholesale and retail increased by 8.35% over the same period of 2014; Lodging and food rose 2.90%; financial activities, banking and insurance increased by 5.85%; real estate business increased by 2.72% which is 2.51% higher than the same period of 2014.
Regarding the structure of the economy, agriculture, forestry and fisheries accounted for 16.73%; industrial sector and construction accounted for 33.45%; service area accounted for 39.61%.
In the first 6 months, there were 45,406 enterprises were established with a total registered capital is 282.4 trillion VietNam Dong (VND), increased by 21.7% in number and 22.3% in the amount of registered capital compared to the same period last year. Besides, there are 10,988 enterprises adjust the registered investment capital, with a total increase of 308.8 trillion VND. Thus, the total newly registered capital and registered add to the economy in the first 6 months of 2015 was 591.2 billion VietNam Dong. The number of enterprises have shut down before return to business operations in the first 6 months is 8,507, increases of 2.2% compare with the same period in 2014.
The number of businesses enterprises complete the dissolution trading process, termination of production activities, in the first 6 months are 4,708, decreases of 0.9% compare with the same period of 2014, of which the majority are small enterprises, with registered capital of less than 10 billion VND. The businesses have difficulty forced to suspend operations in the first 6 months was 27.051 units, down 5.8% from the same period last year.
The entry of enterprises into the market in the first 6 months of 2015 was a significant improvement over the same period last year. It is results of the business community efforts, the suitable solutions, effective direction and management of Government, ministries and agencies in improving the business and investment environment and remove difficulties for enterprises.
Total retail sales of goods and consumer services was estimated at 1572.1 trillion VND, increases of 9.8% comparing with the same period of 2014. Excluding the price factor, this increase is still 8.3%.
International visitors to Vietnam estimated at about 3.8 million, decreases of 11.3% with the same period of 2014, while arrivals by air decreased by 9.1%; road fell 19.7%; and 26.5% by sea. International visitors to Vietnam is much lower compared with other countries in the region (in 2014, Malaysia welcomed 27.4 million; Thailand received 24.8 million, Singapore with 15.1 million; Indonesia got 9.4 million, while Vietnam was 7.8 million respectively). The main reason is that Vietnam has not attracted many visitors for tourism, business and sightseeing objectives while other countries promote for these targets very well. On the other hand, the tourism management by departments and agencies of the country is inefficient and lack of close collaboration.
Macro-economic stability, inflation control
Macroeconomic stability and inflation control are the priority objectives set out by Congress and implement quite well in the first 6 months.
In monetary and credit sector: to date 19/6/2015, credit growth increases of 6.28% compared to December of 2014. The liquidity of the commercial banking system continues to be improved to ensure the solvency of the system and payment. Foreign currency exchange rates reached the amplitude allows of 2% of 2015.
Regarding investment and development, thanks to effective measures by the leadership and administration of government, the increase in disbursement of investment capital has helped boost revenue and disbursed capital inflow of domestic and foreign direct investment. Actual social investment funds of 6 months at current prices is estimated at 553.8 trillion VND, up 9.4% compare with the same period last year and accounts for 31.1% of GDP. It is significant to note that the capital from public sector reached 214 trillion VND, accounting for 38.7% of the total and marks an increase of 7.2% over the same period last year; non-state sector capital reached 202.8 trillion VND, accounting for 36.6% and increase by 11.4%; foreign direct investment reached 137 trillion VND, accounting for 24.7% and increase by 9.9% comparing with same period of 2014.
In foreign direct investment sector, up to 20/6/2015, Viet Nam has 757 newly licensed projects with total registered capital reached 3839.2 million USD, increase by 15.4% of total projects and decrease by 21% in capital amount over the same period of 2014. At the same time, 281 licensed projects are granted additional capital to 1654.2 million USD. Thus the total registered capital of the new projects and additional allocations reach 5493.4 million USD, decrease of 19.8% compared with the same period last year. Implemented capital of foreign direct investment in the first 6 month was estimated at 6.3 billion USD, increase of 9.6% compared with the same period of 2014.
Relating the revenues and expenditures of state budget: the state budget revenues from the beginning of the year to 15/6/2015 is about 406.2 trillion VND, equivalent to 44.6% of the estimation, of which domestic revenue is 298.8 trillion VND, equal to 46.8%; oil revenues 32.6 trillion VND, equal to 35%; balance of exports and imports is 73.4 trillion VND, equal to 41.9%.
The total state budget expenditures from beginning of the year to 15/6/2015 are about 501.2 trillion VND, equal to 43.7% of the estimation, of which spending for investment and development was 80.8 trillion VND, equal to 41.4% (expenditure for fundamental construction was 78.4 trillion VND, equal to 41.2%); expenditures for economic, social, defense, security, state management development were 345.3 trillion VND, equal to 45%; expenditures for debt, aid was 71 trillion VND, equal to 47.4%.
Export and import of goods still maintain the stable growth. Export turnover was estimated at 77.7 billion USD, increase of 9.3% comparing with the same period last year, but lower than the increase of 15.4% in the first 6 months of 2014 comparing with same period of 2013. Excluding price factors, turnover of 6-months exports were estimated at 80.7 billion USD, increase of 13.4% comparing with same period of 2014. Export declined sharply in those goods such as crude oil fell 47.6%; rubber fell 22.4%; rice fell 4.7%; cassava and cassava products fell 5.3% … In total export turnover of 6 months, the domestic sector export was 22.8 billion USD, decrease of 2.9%; foreign investment export (including crude oil) was 54.9 billion USD, increase of 15.3%, which is lower than the increase of 16.1% in 2014 comparing with same period of 2013. However, it still accounted for 70.6% of total export value, the highest level ever. The increase in export turnover of foreign direct investment contributed 10.3% to the overall increase, while domestic sector contribution reduced by 1% of the overall increase.
Import turnover of the first 6 months was estimated at 81.5 billion USD, increase of 17.7% over the same period of 2014, higher than the increase of 10.5% in the first 6 months in 2014 comparing with the same period of 2013. Domestic sector import was 32.7 billion USD, increase of 7.7% over same period of 2014, lower than the increase of 10.6% in 2014 comparing with same period of 2013. Foreign investment import was 48.8 billion USD, increase of 25.5%, higher than the growth of 10.4% in 2014 comparing with 2013. Excluding the price factor, the value of imported goods in 6 months were estimated at 84.6 billion USD, increase of 22.1% over the same period last year.
In the first 6 months of 2015, trade deficit estimate was 3.7 billion USD, which equal to 4.8% of total export turnover.
The main reason comes from the deficit of domestic investment sector with value of 9.8 billion USD, increase of 44% (3 billion USD) compared with 6.8 billion USD in the same period of 2014. The foreign investment sector continued to gain trade surplus with 6.1 billion USD.
In June 2015, the consumer price index increased by 0.55% compared with that in December, 2014 and increase of 1% compared with same period last year. During the first 6 month of 2015, average CPI increases only 0.1% each month, the lowest rate in recent years.
Social issues
Labor and employment sector: up to 1/7/2015, the labor force (from 15 age and older) is estimated at 53.86 million persons, increasing by 147,000 persons compared with same period of 2014, including 27.75 million male workers, accounting for 51.53%; 26.11 million female employees, accounting for 48.47%. Regionally, the labor force in urban area is 16.81 million, accounting for 31.2%; in rural area is 37.05 million, accounting for 68.8%. The unemployment rate is estimated at 2.44%, while in urban area is 3.35%; rural area is 2.00%. The unemployment rate of young people (aged 15 – 24 years) was estimated at 6.71%, which the figure for urban area is 11.04%; rural area is 5.15%. The unemployment rate of workers beyond 25 years old in the first 6 month was 1.38%, which in urban area is 1.89%; rural area is 1.13%. The proportion of unemployed workers in the first 6 months of 2015 is estimated at 2.52%, which in urban area is 1.29%; rural area was 3.11%.
Total operating expense for social security and poverty reduction to ensure people’s life in the first 6 months is 3,268 billion VND, including 2,179 VND by gifts and support for people in special living condition; 765 billion VND to support the poor families and 324 billion VND for hunger and other social relief. Besides, more than 5.9 million health insurance are free issued for the poor and special individual in the whole country.
Education and training continue to have many fundamental innovation and comprehensive training. In the first time, the national exams (combining the high school graduation and college entrance) will be held in the July 2015 is expected to reduce the cost of examinations for candidates and the state budget.
In the first 6 months, many cultural and sports activities are organized at the large scale in the locals … In the high level, Vietnam sport delegation won 155 gold medals, 121 silver medals and 121 bronze medals. In the 28th Southeast Asian Games, Vietnam ranked at 3out of 11 participating countries with 73 gold medals, 53 silver medals and 60 bronze medals, breaking 13 records.
Overall, the society and economy situation of Viet Nam in the first 6 month of 2015 continued to be stable with good results: production improvements, positive growth and stable macro-economic balance.
However, the economy will have to face many difficulties and challenges to achieve the development objectives of 2015.
First, continue to improve the business and investment environment … Enhancing market management, combating smuggling and counterfeit goods to protect domestic producers. Promoting the reform of administrative system, simplifying customs procedures, and reforming tariff procedures.
Second, increasing exports, reducing trade deficit through the preparation of goods with guaranteed quality, design and safety requirement for export to the signed BTA market (Korea …).
Third, continuing to implement agricultural restructure towards higher value-added and sustainable development. Promoting agricultural production in the ways that build the value chain, from production, purchasing, processing to preservation and consumption in order to create a brand for agricultural products.
Fourth, continuing to focus on resolve public debt, controlling the bad debts with specific strategy, transparency and clarity. Implementing flexible monetary policy with reasonable exchange rate management to deal with bad debts.
Fifth, continuing to establish and perfect the legal system concerning social welfare activities.
M.A Nguyen Minh Trang
Diplomatic Academy of Vietnam
References
Bad debt reserves cut Vietcombank gains
http://english.vietnamnet.vn/fms/business/135280/bad-debt-reserves-cut-vietcombank-gains.html
FDI flows into textile-garment projects
http://english.vietnamnet.vn/fms/business/134991/fdi-flows-into-textile-garment-projects.html
Vietnam, bright point in ASEAN economy in first-half 2015
http://news.kuwaittimes.net/pdf/2015/jun/03/p23.pdf
Vietnamese loosen purse-strings as economy improves
http://english.vietnamnet.vn/fms/business/134904/vietnamese-loosen-purse-strings-as-economy-improves.html
US billionaire amazed at Vietnam’s economic change
http://english.vietnamnet.vn/fms/business/134961/us-billionaire-amazed-at-vietnam-s-economic-change.html
Il CeSE-M sui social