Vietnam GDP Slows Down to 5.43% in Q1 2011: GSO

Vietnam gross domestic product (GDP) is estimated to have slowed down to 5.34% in the first quarter of this year from 5.84% on the same period of 2010

Vietnam gross domestic product (GDP) is estimated to have slowed down at 5.34% in the first quarter of this year compared with 5.84% on the same period of 2010, likely due to the recent tight policy on the government Resolution 11/NQ-CP, the General Statistics Office of Vietnam said.

In January- March, Vietnam industry and construction sector grew by 6.64%, service sector up 5.6% and agriculture, forestry and aquaculture rose 2.05%, according to the office’s figures.

The Ministry of Planning and Investment, however, warned of challenges including accelerating retail prices, high interest rates which are unaffordable for many enterprise, high trade deficit and possible natural disasters.

Meanwhile Vietnam’s consumer price index in the first quarter is estimated to have surged 6.12% on-year, compared with the 2011 inflation target of 7%, the GSO said.

The country posted export revenue of $19.2 billion, up 33.7% on-year and spent $22.3 billion to import goods, up 22.7% on year, suffering $3.1billion trade deficit in the period.

Vietnamese law makers on November 8 passed the 2011 resolution which includes the targets of the economic growth rate of 7-7.5% and inflation curbed at 7%.

Earlier, the Prime Minister has ordered the State Bank of Vietnam to carry out the tightening policy by cutting credit growth target to below 20% from 23% and reducing the target of money supply (M2) growth to 15-16% from 21-24% earlier. The lending interest rates are mostly at 19%-21% per annum, which scared some enterprises away from borrowing.

On the March report, HSBC revised its 2011 GDP of Vietnam forecast from 7.5% to 7% due to the government’s new focus on controlling inflation. HSBC says Vietnam is heading into the right direction as its “single minded pursuit of growth has been replaced with an emphasis on righting the tilting ship”.

The World Bank said in the report of World Bank East Asia and Pacific Economic Update 2011released on March that the Southeast Asian country’s economy may grow 6.3% this year.

Tags: Vietnam GDP 2011, Vietnam inflation 2011