Monday , June 17 2024

Vietnam faces challenges in hitting growth targets

The country is facing stiff obstacles in achieving growth targets of 6-6.5% this year due to a low base in the first half, the Minister of Planning and Investment said Tuesday.

To reach GDP growth of 6% for the whole year, the economy needs to expand by 8% in the second half, Minister Nguyen Chi Dung said in a government meeting.

To achieve 6.5% growth rate, an expansion of 8.9% in the last six months is needed, he added.

Dung proposed that government bodies and localities “untangle the knots” that businesses are facing to help boost manufacturing, consumption and exports.

Authorities need to resolve issues in the property, stock and bond markets to make them reliable channels for capital mobilization, he added.

Bureaucracy needs to be reduced and the business environment improved, he said.

Several international organizations have lowered their growth forecast for Vietnam this year. The International Monetary Fund lowered its projection from 5.8% to 4.7% in a report last month.

The economy, however, seems to be recovering in the second quarter, according to the planning ministry.

The average Consumer Price Index in the first six months was 3.39% higher year-on-year, and the country managed to record a trade surplus of $12.2 billion.

Investment rose 4.7% year-on-year to VND1.35 quadrillion ($57 billion) and disbursement of public investment reached VND65 trillion, nearly 30.5% of target.

Services, one of the three key pillars of the economy, grew 6.3% year-on-year and contributed to GDP growth by 80%.

Prime Minister Pham Minh Chinh, however, said that the nation faced many obstacles.

Growth in the first six months was 3.72% against a target of 6.2%. Many factories faced challenges and many workers lost their jobs.

Around 2% of workers were unemployed in the second quarter, mostly in Hanoi, Ho Chi Minh City, Bac Giang and Dong Nai.

The planning ministry said that many companies, which had been weakened by the pandemic, were now on the verge of bankruptcy.

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