Economy faces unprecedented woes in 2016

31-Dec-2016 Intellasia | The Saigon Times | 6:00 AM Print This Post

Minister of Planning and Investment Nguyen Chi Dung told a teleconference on December 28 that Vietnam’s economy has grappled with unprecedented woes this year.

“This year’s difficulties are huge and unprecedented compared to previous years,” Dung said.

Dung added gross domestic product (GDP) growth of 6.21 percent in 2016 is well below the recent estimate of 6.3-6.5 percent and the full-year target of 6.7 percent.

The industry-construction sector has expanded 7.57 percent and the services sector had grown 6.89 percent, thus becoming key drivers of economic growth this year. Meanwhile, agriculture has registered an insignificant 1.36 percent rise due to drought, saltwater intrusion and flooding in many parts of the country.

The consumer price index (CPI) has nudged up 4.74 percent versus the end of 2015, lower than the approved target of 5 percent.

Foreign direct investment (FDI) activity is another highlight. As of December 26, fresh FDI approvals had totalled $24.37 billion and FDI disbursements had amounted to $15.8 billion, a 9 percent year-on-year pickup.

According to a general Statistical Office (GSO) report released on Wednesday, the country has had 110,100 startups and 26,689 suspended firms have resumed operations in 2016. In contrast, 60,667 firms have got out of business, a fall of 15.2 percent from a year earlier, including 19,917 registering for temporary suspension and 40,750 others suspending operations without registration or waiting for dissolution.

Agri-aqua-forestry has experienced a 62.4 percent contraction as companies have stopped operations without registration or have waited for dissolution, followed by mining with 51.6 percent, transport-warehousing with 36.1 percent, lodging and dining services with 35.7 percent, and construction with 25.8 percent.

There are 12,478 businesses having completed dissolution procedures, up 31.8 percent versus 2015, with 93.1 percent of them having capital of less than VND10 billion.

According to the GSO, GDP per capita is estimated at VND48.6 million (US$2,215) this year, up $106 versus 2015.


Category: Economy, Vietnam

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