[Vnbiz] Vietnamese GDP growth slows

[Phan, Tai]

Vietnamese GDP growth slows  
By Jason Folkmanis Bloomberg News

Published: July 4, 2006
 
 
HO CHI MINH CITY Economic growth in Vietnam slowed in the first half, the government said Tuesday, as reduced oil production crimped industrial expansion and farm output was stifled by animal diseases and storms.
 
Vietnam's gross domestic product expanded 7.4 percent in the six months ending June from a year earlier, according to preliminary figures from the General Statistics Office in Hanoi, down from a 7.6 percent pace in the same period in 2005. Vietnam's economy grew 8.4 percent last year, the fastest pace since 1996.
 
Vietnam's per-capita GDP has jumped by three-fifths this decade to about $640, buoyed by rising domestic consumption, exports and foreign investment. The government wants to increase the figure to as much as $1,100 by 2010, in a bid to move out of the ranks of the world's poorer nations.
 
"In the first six months, despite many strengths, the country's economy faced various difficulties and challenges," the General Statistics Office said. "Foot-and-mouth disease was found in domestic animals, while a typhoon caused human and material losses and directly damaged aquatic production."
 
Agriculture, forestry and fisheries, which together accounted for 21 percent of the Vietnamese economy in the first half, gained 3 percent in the first half from a year ago, down from 4.4 percent in the same period in 2005.
 
While direct financial losses from a foot-and-mouth outbreak that spread to about half of Vietnam's provinces and major cities have been limited, the indirect impact has been larger, including money spent on vaccines; a reduction in the transport of livestock; and declining prices for meats such as pork, the Saigon Times Daily reported May 23.
 
In May, Typhoon Chanchu led to the death of more than 200 Vietnamese fishermen and to the sinking of at least 18 fishing vessels, and as a result, Prime Minister Nguyen Tan Dung has asked authorities for better coordination and inspection of the nation's offshore fishing fleets, the Vietnam News Agency reported Monday.
 
The slowdown in Vietnamese agricultural growth in the first half "can largely be attributed to natural calamities," the World Bank said in a June report, which cited drought in northern Vietnam and floods in the north-central region and southern Mekong Delta.
 
Industry and construction, which together account for 41 percent of the economy, expanded 9.3 percent, with the component including oil production growing 0.7 percent. Vietnam Oil & Gas in January forecast a 4 percent drop in national crude oil output in 2006, citing the aging of the top field in Vietnam, Southeast Asia's third- biggest oil producer.
 
Services, which make up 39 percent of the economy, grew 7.7 percent in the first half, with the hotel and restaurant trade expanding by 11 percent. The services component of the economy has "maintained the strength it had acquired in 2005," the World Bank report said. "During the past year, tourism-related services were especially buoyant."
 
The component including telecommunications expanded at a 9.9 percent annual rate. Vietnam promised to further open its telecommunications market and prevent anti-competitive behavior in the industry as part of commitments the country has made in its bid to join the World Trade Organization, according to the Office of the U.S. Trade Representative.
 
"The Vietnamese market for postal and telecommunications services is now developing very quickly compared with others in the region," said Pham Dinh Dung, general director of Vien Lien Joint-Stock, which Monday listed its shares on the Ho Chi Minh City Securities Trading Center.
 
Output in the category including financial services grew 9.3 percent from a year ago, according to the General Statistics Office.
 
"Vietnamese financial services should see rapid growth on the back of the impact of WTO accession, which will encourage greater competition, more foreign investment, and an upgrade of the financial infrastructure," said Spencer White, chief Asian equity strategist at Merrill Lynch in Hong Kong. "Only about 4 percent of the population has a bank account."
 
Vietnam's government, which is targeting annual economic growth of at least 8 percent, expects industry and construction's share of the economy to rise to much as 44 percent by 2010 while services would account for as much as 41 percent of GDP, with agriculture, forestry, and fisheries' share dropping to as little as 15 percent. 
 
 HO CHI MINH CITY Economic growth in Vietnam slowed in the first half, the government said Tuesday, as reduced oil production crimped industrial expansion and farm output was stifled by animal diseases and storms.
 
Vietnam's gross domestic product expanded 7.4 percent in the six months ending June from a year earlier, according to preliminary figures from the General Statistics Office in Hanoi, down from a 7.6 percent pace in the same period in 2005. Vietnam's economy grew 8.4 percent last year, the fastest pace since 1996.
 
Vietnam's per-capita GDP has jumped by three-fifths this decade to about $640, buoyed by rising domestic consumption, exports and foreign investment. The government wants to increase the figure to as much as $1,100 by 2010, in a bid to move out of the ranks of the world's poorer nations.
 
"In the first six months, despite many strengths, the country's economy faced various difficulties and challenges," the General Statistics Office said. "Foot-and-mouth disease was found in domestic animals, while a typhoon caused human and material losses and directly damaged aquatic production."
 
Agriculture, forestry and fisheries, which together accounted for 21 percent of the Vietnamese economy in the first half, gained 3 percent in the first half from a year ago, down from 4.4 percent in the same period in 2005.
 
While direct financial losses from a foot-and-mouth outbreak that spread to about half of Vietnam's provinces and major cities have been limited, the indirect impact has been larger, including money spent on vaccines; a reduction in the transport of livestock; and declining prices for meats such as pork, the Saigon Times Daily reported May 23.
 
In May, Typhoon Chanchu led to the death of more than 200 Vietnamese fishermen and to the sinking of at least 18 fishing vessels, and as a result, Prime Minister Nguyen Tan Dung has asked authorities for better coordination and inspection of the nation's offshore fishing fleets, the Vietnam News Agency reported Monday.
 
The slowdown in Vietnamese agricultural growth in the first half "can largely be attributed to natural calamities," the World Bank said in a June report, which cited drought in northern Vietnam and floods in the north-central region and southern Mekong Delta.
 
Industry and construction, which together account for 41 percent of the economy, expanded 9.3 percent, with the component including oil production growing 0.7 percent. Vietnam Oil & Gas in January forecast a 4 percent drop in national crude oil output in 2006, citing the aging of the top field in Vietnam, Southeast Asia's third- biggest oil producer.
 
Services, which make up 39 percent of the economy, grew 7.7 percent in the first half, with the hotel and restaurant trade expanding by 11 percent. The services component of the economy has "maintained the strength it had acquired in 2005," the World Bank report said. "During the past year, tourism-related services were especially buoyant."
 
The component including telecommunications expanded at a 9.9 percent annual rate. Vietnam promised to further open its telecommunications market and prevent anti-competitive behavior in the industry as part of commitments the country has made in its bid to join the World Trade Organization, according to the Office of the U.S. Trade Representative.
 
"The Vietnamese market for postal and telecommunications services is now developing very quickly compared with others in the region," said Pham Dinh Dung, general director of Vien Lien Joint-Stock, which Monday listed its shares on the Ho Chi Minh City Securities Trading Center.
 
Output in the category including financial services grew 9.3 percent from a year ago, according to the General Statistics Office.
 
"Vietnamese financial services should see rapid growth on the back of the impact of WTO accession, which will encourage greater competition, more foreign investment, and an upgrade of the financial infrastructure," said Spencer White, chief Asian equity strategist at Merrill Lynch in Hong Kong. "Only about 4 percent of the population has a bank account."
 
Vietnam's government, which is targeting annual economic growth of at least 8 percent, expects industry and construction's share of the economy to rise to much as 44 percent by 2010 while services would account for as much as 41 percent of GDP, with agriculture, forestry, and fisheries' share dropping to as little as 15 percent.