Nine-month GDP growth reaches 6.98 percent - record in nine years

Gross domestic product (GDP) in the first nine months of 2019 is estimated to rise 6.98 percent year-on-year (Illustrative image. Source: VNA)

Hanoi (VNA) - In the first nine months of 2019, the final consumption expenditure was 7.2 percent, while asset accumulation rose 7.68 percent, and exports expanded 7.41 percent. Meanwhile, imports of goods and services increased 8.78 percent over the same period last year.

According to the General Statistics Office (GSO), the gross domestic product (GDP) of Vietnam in the first nine months of this year is estimated to expand 6.98 percent compared to the same time last year, which is the highest rise in the recent five years.

GDP growth reached 6.82 percent in the first quarter, 6.73 percent in the second quarter and 7.31 percent in the third quarter.

A representative from the GSO said that when the global economy is slowing down with many risky factors and challenges such as the US-China trade tensions, the escalating geopolitical tension in the Persian Gulf, the gloomyfuture of Brexit process and instability in policy on the global scale, business and market trust has decreased, along with falling trade and investment. International organizations have given unoptimistic forecast on the world economic growth for 2019.

“However, the result of 6.98 percent in GDP growth has confirmed the timely and effective direction and management of the Government as well as efforts of sectors and localities in realizing socio-economic development plans to reach the growth targets for the whole year,” said the representative.

Under a GSO report, the agro-forestry-fisheries sector enjoyed a rise of 2.02 percent compared to 3.7 percent recorded in the same period in 2018, contributing 4.8 percent to the overall growth.

Agriculture has yet to rebound, inching up 0.74 percent year-on-year, lower than that of 2017 and 2018. Fishery was the sector’s best performer which increased 6.12 percent while forestry grew by 3.98 percent.

Meanwhile, the industry and construction sector expanded 9.36 percent, making up 52.6 percent of the total growth, and that of service sector was 6.85 percent with contribution of 42.6 percent to the overall expansion.

However, the major motivation for the economic growth in the first nine months of this year was from the processing-manufacturing sector with an increase of 11.37 percent, along with market service sectors including retail and wholesale, with an expansion of 8.31 percent, and financial and banking and insurance sectors with 8.19 percent. Total nine-month retail sales of consumer goods exceeded 3.63 quadrillion VND (154.8 billion USD), a year-on-year increase of 11.6 percent, excluding inflation.

The transportation and storage sector grew 7.82 percent, while information and communications enjoyed growth of 7.65 percent.

In terms of economic structure in the first nine months of this year, the agro-forestry-fisheries sector made up 13.20 percent of the total GDP, while the industry and construction sectors accounted for 33.98 percent and service 42.74 percent. Products taxes less subsidies on production were 10.08 percent.

Under the view of GDP use in the January-September period, the final consumption expenditure was 7.2 percent, while asset accumulation rose 7.68 percent, and exports expanded 7.41 percent. Meanwhile, imports of goods and services increased 8.78 percent over the same period last year.

With the results, economists are upgrading their growth projections for Vietnam.

Citigroup Inc. revised its full-year forecast of Vietnam’s GDP to 6.9 percent from 6.7 percent, on the basis of another solid performance in the fourth quarter.

Analysts at Maybank Kim Eng Research Ltd. also lifted their forecast of Vietnam’s economic expansion to 7 percent from their previous prediction of 6.8 percent.

Meanwhile, United Overseas Bank Ltd. changed to 6.8 percent for the year from 6.7 percent, and Capital Economics Ltd. kept their projection of 7 percent, Bloomberg said.

Solid exports and manufacturing growth enabled the third-quarter gain of 7.31 percent.  The expansion was the highest since the start of last year, and reflects growing foreign investment into Vietnam.

According to two economists of Maybank – Linda Liu and Chua Hak Bin, rising foreign direct investment and “buoyant domestic demand, as suggested by the recent robust retail sales growth”, will keep the momentum going through the year-end and in early 2020.

HSBC predicts that inflation in Vietnam will be kept below 2.7 percent, while GDP growth is expected to ease to 6.7 percent in the whole year.

Edward Lee, chief economist for ASEAN and South Asia at Standard Chartered Bank Global Research, said he believes that Vietnam will be the fastest growing economy in ASEAN this year with a projected growth of 6.9 percent, and the upward trend is expected to continue until 2021./.