Vietnam’s economic situation for September and nine months of 2004

1. Main aggregates

Home gross outputs for nine months of 2004 are estimated to increased by 7.4% compared to the same period last year, of which the agriculture, forestry & fishing increases by 2.9%, the industry and construction by 10.1% and the service sector by 7.1%. Of this, the agriculture, forestry & fishing shares by 0.6%, the industry and construction by 3.9% and the service sector by 2.9%.

Total Government revenues for the nine months are estimated at 78.9% of the year’s estimate, of which revenues from domestic activities are 78.9%, from crude oil are 97.8%, and from exports-imports balance are 66.2%. Total government expenditures are estimated at 71.1% of the year’s estimate, of which regular spending is 79.2%, investment & development spending is 63.6% (capital construction takes 62.8%); debts and aids payments-78.9%. Overspending is low to GDP and equivalent to 44.7% of the annual overspending rate that is approved by the NA, which is compensated by borrowings from home and abroad (home: 84.3% and abroad: 15.7%).

2. Agriculture, forestry & fishing production

Although there are certain difficulties in 2004, production of the sector still increases more than last year. The production value by the constant price of 1994 is estimated at 172.8 thousand billions VND, increasing by 4.9% against 2003, of which agriculture gains 133.2 thousand billions VND and increases by 4%, forestry: 6.2 thousand billions VND and 0.8%, fishing: 33.4 thousand billions VND and 9.4% respectively. Details are as follows:

Agriculture

Rice cultivated area for the year is estimated at 7,420.8 thousand hectares, decreasing 31.4 thousand hectares to last year, of which Winter-Spring rice area is 2978.6 thousand hectares and decreases by 44.3 thousand hectares; Summer-Autumn rice area is 2353.8 thousand hectares and increases by 33.8 thousand hectares; Autumn-Winter rice area is 2088.4 thousand hectares and decreases by 20.9 thousand hectares. Rice productivity of the year is estimated at 4,800.1 kilogram per hectare and increases by 170 kilogram per hectare; rice yield is estimated reaching to 35.7 million tons and increases by 1.16 million tons and 103%  against last year. If 3.4 million ton of other grain crops are included, food   production would be 39.1 million tons and increases by 1.4 million tons against 2003.

Production of vegetables and annual industrial plants increases considerably: vegetables and beans reach to 9038.1 thousand tons and increase by 8.4%; soybean:  230.9 thousand tons and 5.1%; groundnut: 462,000 tons and 13.7%; sesame:  25,000 tons and 76.1% respectively; however, sugarcane production reaches to 15541.2 thousand tons and 92.2% only due to price fluctuation and limited market, and cotton production is 98.3% of last year due to long lasting drought.

Production of perennial industrial trees increases much more than 2003: tea reaches to 487.4 thousand tons and increases by 38.8 thousand tons; coffee gains 832.1 thousand tons and increases by 38.4 thousand tons; rubber: 404.6 thousand tons and 41.1 thousand ton increased; pepper: 73.8 thousand tons and 5.2 thousand tons increased; cashew nuts: 204 thousand tons and 39.6 thousand tons increased. Fruits cultivated area reaches to 747.4 thousand hectares and increases by 10.3 thousand hectares; litchi: 1.7 thousand hectares increased; bananas: 2.6 thousand hectares increased.

Animal feeding is maintaining and developing to meet requirements for meat at home and for exportation. Domestic fowls are recovering from the fowl flue plague. To 01/8/2004, there are 2.9 million buffalos, increasing by 1.2% against 2003; 4.9 million bulls and cows, increasing by 11.7%; 26.1 million pigs, increasing by 5.1%; 218.2 million fowls, decreasing by 14.3%, of which there are 159.2 million chickens, decreasing 14%; Production of live-weight meat reaches to 2.5 million tons and increases by 7.6%.

Forestry

The centralised forestation area in nine months of 2004 reaches to 140.9 thousand hectares, equivalent to 99.9% of the same period in 2003, which is estimated at 180.1 thousand hectares and equivalent to 99.3% of 2003 for the whole year of 2004. Wood cutting production in the first nine months is estimated increasing by 0.8% against the same period in 2003; It is estimated that wood cutting production for the whole year will be 2459.4 thousand m³ and increase by 1% due to the increase in demands for paper materials which speeds up the wood cutting process.

Forest damages due to being burnt and deforested though decrease but are in a high rate: there are about 5,177 hectares for nine months, which decrease by 1,322 hectares compared to the same period last year. Burnt area is 3,976 hectares, decreases by 26.8%. Deforested area is 1,201 hectares, increases by 13%.

Fishing

It is estimated there are 902.9 thousand hectares used for aquaculture, increasing by 4.3%, with a production of 748.7 thousand tons, increasing by 11.4%, of which fish increases by 11.3% and shrimp increases by 15.8%. There is an estimate of 1,132 thousand tons and an increase of 13.4% for the whole 2004, of which fish: 686.4 thousand tons, 14.4% increased and shrimp: 227.4 thousand tons, 16.7% increased.

The aquatic product exploiting and developing operation this year is more eventful than last year and basically in a weather favoured condition. Production of nine months is estimated at 1498.7 thousand tons, increasing by 3.9% against the same period last year, of which sea products reach to 3,055.3 thousand tons and increase by 5.4%. In 2004, there is an estimate of 1,923.3 thousand tons of aquatic products exploited and an increase of 3.6%, of which catching of sea products will reach to 1,722 thousand tons and increase by 4.5%.

Production of aquatic products in 2004 as a whole is estimated reaching to 3,055.3 thousand tons, increasing by 7% (200 thousand tons) over last year, of which fish will be 2,114.9 thousand tons, increasing by 7% (136 thousand tons), shrimp: 379.5 thousand tons, increasing 11.5% (39 thousand tons).

3. Industrial production

Industrial production in September continues to increase more rapidly than September last year and its increased rate is even higher than that of previous 8 months. September’s production value is estimated at 31.0 thousand billions VND (as at 1994 prices), increasing by 16% over September last year, of which state sector increases by 14.3%; non state sector increases by 21.8%; foreign investment sector increases by 15.6% (oil and gas: 14%, others: 16.1%).

Generally, industrial production in nine months of the year still keeps a high growth rate as compared to the same period last year. Industrial production value is estimated at 264.6 thousand billion VND, increasing by 15.5% over the same period last year, of which state owned enterprises gain 98.2 thousand billion VND, increasing by 12.2% (enterprises under central government increase by 14.6% and enterprises under local governments increase by 7.4%); non state sector gains 70.1 thousand billion VND, increasing by 21.6%; foreign investment sector gains 96.3 thousand billion VND and increases by 14.8% (oil and gas: 21.1%, others: 12.6%).

High but not even growth rate among economic sectors results in slight changes in the structure of economic sectors towards a tendency of higher proportion for sectors having high increased rate and lower proportion for sectors having lower increased rate.

Reasons for a high growth rate of industrial production in the first nine months of 2004 are that (1) domestic demands for industrial products increase due to their increased quality and fashion; export of industrial products increases rapidly, contributing nearly 80% to the export increased rate; (2) enterprises continue making more investment in production to improve equipment, reduce product unit price and improve the product competitiveness in domestic and international markets and step by step integrate with the region and the world; (3) state owned enterprises are reformed by the way of promoting the privatization and  reducing losses running units. Enterprises are developing in accordance with the Enterprise Law that was issued in 2000. Additionally, the Government also gives its guidance to solve the problem of booming prices of imported and input raw materials and makes a good control of the circulation of goods.
4. Investment

Realisation of the development investment capital in nine months at the constant prices of 1994 is estimated at 178.4 thousand billion VND, equalling 71.6% of the year’s plan and increasing by 19.1% against the same period last year. Of this, government capital accounts for 58.3%, private capital takes 27.2% and FDI takes 19%.

Construction capital of the state budget is estimated at 30.7 thousand billion VND, accounting for 82.7% of the year’s plan, of which capital under central government is 10.9 thousand billion VND, accounting for 83.4% of the year’s plan and capital under local governments accounts for 82.3% of the year’s plan.

The realisation of the construction capital meets many difficulties and affects on the increased rate of accumulative fixed assets and the production value of the construction sector because prices of steel and oil are high; the speed of site clearance in some construction works is still slow; there are shortcomings in investment and management…The realisation of construction capital of the state budget for the whole 2004 is estimated at 41.4 thousand billion VND, accounting for 110.9% of the year’s plan.

Foreign Direct Investment: From beginning of the year to 20/9/2004, there are 518 projects that have granted licenses with a total registered fund of 1.6 billion USD; average capital per project is 3.1 million USD (the number of the same period last year is 2.5 million USD). Number of license-granted projects distributed to provinces is different in number of projects, number of investment capital and project scale. Provinces and cities in the South have 369 projects with 1,035 million USD, accounting for 71.2% of the projects and 64.6% of the registered capital. And provinces and cities in the North have 149 projects with 567.7 million USD, accounting for 28.8% of the projects and 35.4% of the registered capital.

5. Transportation

Passenger transport in nine months of 2004 is estimated carrying 714.1 million passengers and 33.3 billion passengers-kilometres, increasing by 6.1% in number of passengers and 14.4% in passengers-kilometres. Railway increases by 11.7% in number of passengers and 9.3% in passengers-kilometres; airway achieves carrying of 3.7 million passengers, increasing by 37% and 58% respectively; land transport takes more than 85% of passengers, increasing by 6.8% and 7.5%.

Cargo transport achieves 194.5 million tons and 42.9 billion tons-kilometres, increasing by 5.6% in tons and 9.1% in tons-kilometres against the same period in 2003. Cargo transport abroad takes a large proportion, accounting for over 50% of tons-kilometres and increasing by over 10.2% against the same period last year. On the other hand, rapidly increased quantity of exports boosts the demands for transport of goods to foreign countries. This is why the sea-born cargo transport takes 69% of tons carried, increasing by 8.4% in tons and 10.2% in tons-kilometres. The railway increases by 4.5% and 5.6% respectively; land transport: 5.6% and 6.5%; river-way transport: 4.7% and 7.8% respectively.
6. Trade, prices and tourism

September’s total retail sales of goods and services at constant prices are estimated at 274.2 thousand billion VND, increasing by 18.3% as compared with the same period last year. The state sector gains 43.3 thousand billion VND, accounting for 15.8% and increasing by 9.8%; the collective & corporation sector gains 2.6 thousand billion VND, accounting for 0.9% and increasing by 21.7%; the individual sector gains 173.2 thousand billion VND, accounting for 63.2% and increasing by 17.3%; the private sector gains nearly 49 thousand billion VND, accounting for 17.9% and increasing by 32.3%; the foreign investment sector gains 6.1 thousand billion VND, accounting for 2.2% and increasing by 9.9%. Considering the business sector, the increase in the total retail sales is mainly due to activities of the trade which accounts for over 80% of the total retail sales and increases by 20% over the same period last year. The rate is much higher than last September.

Consumer prices: the price fluctuation trend this September is different from that of the same period in 2001, 2002 and 2003: consumer prices from beginning of the year to now are continuing to raise month to month, thus this September’s consumer prices are considerably higher than December and September 2003. Average consumer prices of this September are 7% higher than 9/2003.

Consumer prices in 9/2004 increase by 0.3% over last month, of which prices of all groups also increase (except for the group of culture, sports and recreations which decreases by 0.1%). Gold price increases by 1.5% over last month and last December. Similarly, price of USD increases by 0.1% and 0.3% respectively.

Imports-exports:

There is a considerably high growth rate of imports and exports in nine months of 2004. Total turnover is estimated at 41.56 billion USD, increasing by 23.9% over the same period last year, of which exports increase by 27.2% and imports by 21.3%. As the rate of exports is larger than imports, the trade deficit decreases as compared to last year and the rate of trade deficit to nine months is 17.8% only (while it was 23.5% for the same period last year).

Generally, export turnover is estimated at 19.1 billion USD and increases by 27.2% against the same period last year. Average turnover per month is 2.1 billion USD- the highest level up to now and higher than the average 1.67 billion USD of the same period last year. Export turnover excluding crude oil is 15 billion USD, increasing by 23.4%, of which the domestic economic sector gains 8.7 billion USD, increasing by 15.2%, and the foreign investment sector gains 6.4 billion USD, increasing by 37.1%.

Reasons for this are that (1) the recovery of the world economy and the rapid growth of big economies like the United States, Japan, China, EU… has made demands for imports increase and prices raise in favour of exporters. Statistically, turnovers in exported quantity of goods in nine months increase by 1.8 billion USD, of which increased amount  due to raising price is about 1.1 billion USD (particularly over 800 million USD increased due to crude oil raising price), and increase in quantity is about 700 million USD only . (2) Production of industrial and agricultural goods increased more rapidly than the same period last year; and (3) active results from activities in expanding markets and pushing up exportation, especially promoting trade transactions by the Government and related agencies.

Import turnover for nine months of 2004 is estimated at 22.5 billion USD, increasing by 21.3% over the same period last year, of which 14.6 billion USD, increasing by 20.7%  come from the domestic economic sector, and 7.9 billion USD, increasing by 22.6% from the foreign investment sector. Nine month import turnover for almost items, except automobiles and machines, also increases more than last period, especially, oil and petroleum, steel, fertilisers, plastics and cotton have a great boost (over 23%), mainly due to raising costs of import. However, quantity of almost imported raw materials (except cotton, plastic and petroleum) decreases as compared to last period. Raising turnover is basically due to raising costs while imported quantity dose not match. That would cause a double unfavourable effect on domestic economy: on one hand, raising costs cause an increase in the inputs of domestic goods and services, and on the other decreased imported quantity causes an imbalance in the production of related items.

Tourism:  Tourist activities of the nine months are more favourable than the same period last year when the SARS plague occurred. Moreover, this year has great ceremony days like 50 years of Dien Bien Phu Victory, Hue Festival, etc. that attract much more visitors to Vietnam. Number of international visitors to Vietnam in nine months of 2004 are estimated at  2,218.5 thousand, increasing by 30.5% against the same period in 2003, of which number of travellers by tourism purpose are 1,136.2 thousand, increasing by 44.6%; by business purpose: 374.3 thousand, increasing by 14.7%; by relatives visiting purpose: 364.4 thousand, increasing by 28.3%, by other purposes: 253.6 thousand, increasing by 7.9%.

GSO

Tags: Vietnam economic statistics, Vietnam economic statistics 2004, Vietnam's economic situation