Economy blooms in first five months

08:00 | 08/06/2018
Vietnam’s economic situation in the first five months of the year has seen firms’ confidence increasingly strengthen, with industrial production climbing to the highest level seen in the period since 2012.
economy blooms in first five months
The index for industrial production in this year’s first five months rose by an astounding 9.7 per cent year-on-year, Photo: Le Toan

Last week, the Network of German Chambers of Commerce Abroad released a survey of over 5,100 German firms around the world – including in Vietnam – conducted in March and April.

Results showed that 95 per cent of respondents said they will continue investing in Vietnam, 67 per cent will hire more employees in the country, and 61 per cent are expecting better business performances.

Results also showed that 67 per cent of respondents expected Vietnam’s medium-term economic trend to become better. The same number also said that the current business climate is “good”, while 61 per cent expected business trends for the coming 12 months to be “better.” Some 44 per cent also said they will expand their investment in the country.

“Vietnam’s economy is getting brighter, with local production strongly bouncing back. This has helped strengthen investors’ confidence and helped Vietnam attract more foreign investment, including investment from Germany,” Marko Walde, chief representative of German Industry and Commerce in Vietnam, said at a German-Vietnamese forum held in May in Hanoi.

At the Meet Europe 2018 conference organised on May 25 in Hanoi, Prime Minister Nguyen Xuan Phuc told hundreds of Vietnamese and European firms that in this year’s first five months, the economy continued its uptrend, which followed the development foundations laid in 2017.

“According to a EuroCham survey on Vietnam’s investment climate conducted in March 2018, 90 per cent of European firms wish to maintain or even increase their investment in Vietnam,” Phuc said. “I hope that the rate will be 100 per cent in the next survey. Vietnam must be an attractive long-term investment spot for all enterprises.”

The General Statistics Office (GSO) announced last week that the index for industrial production (IIP) in this year’s first five months rose by 9.7 per cent year-on-year, making it the highest five-month IIP increase since 2012.

“One of the biggest drivers of this growth is local production surging more than ever, especially industrial production. There are many reasons for us to believe in Vietnam’s brighter economic prospects from now until the year’s end, and over the next years,” Minister of Planning and Investment Nguyen Chi Dung told the National Assembly (NA).

According to GSO, in this year’s first five months, almost all key indexes of the economy witnessed significant increases. For example, the manufacturing and processing sector, which contributes to nearly 80 per cent of the economy’s industrial production growth, climbed by 11.8 per cent year-on-year, another record climb not seen in the first five months of a year since 2012. Production and distribution of electricity also rose strongly, at a rate of 10.6 per cent year-on-year.

“One of the biggest drivers of industrial manufacturing growth is the big hike of 18.7 per cent year-on-year in the production of electronics, laptops, and optical products,” said GSO head Nguyen Bich Lam. “This is greatly contributed to by South Korea’s Samsung Electronics, which focused on producing high-end mobile phones in February and March.”

While discussing Vietnam’s economic prospects last week, many NA members expressed optimism, expecting the economy to continue its uptrend.

“In this year’s first quarter, the economy grew by 7.38 per cent year-on-year, the highest rise in the first quarter over the past 10 years. Vietnam has surpassed Indonesia to become a major exporter, while its economic scale is one-fifth of Indonesia’s,” said deputy Le Minh Chuan representing the northern province of Quang Ninh.

“Vietnam is expected to grow by over 7 per cent this year thanks to local production’s strong recovery, big exports, and major consumption power in the domestic market,” said Chuan, who is also a member of the legislature’s Economic Committee.

“I want to stress that Vietnam’s economic growth for 2018 will greatly benefit from the positive impacts of free trade agreements, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the country’s business climate improvements, and strong domestic consumption,” Minister Dung said.

By Nguyen Thanh

Based on MasterCMS Ultimate Edition Ver 2.8 2018