HANOI: Vietnam is coming closer to the 6.7 percent GDP growth rate and all 13 socio-economic development targets, though many economists thought the goal would be attainable. The sharp growth rate of 7.46 percent in the third quarter makes it more feasible. Analysts were surprised when the government did not set a higher GDP growth rate for the next year. MPI several months ago submitted three scenarios for the economic growth rate in 2018 to the government. In one scenario, the growth rate would be 6.4 percent. In the average growth scenario, the rate is 6.5 percent and in the high growth scenario, the figure would be 6.81 percent. Tran Quoc Phuong from MPI believes that the average scenario is the most feasible. The driving forces for 2017 growth, such as oil & gas and coal exploitation, the high exports of Samsung, Formosa, and overseas remittances have been fully exploited and there will be no breakthroughs in 2018. The mining industry is likely to continue declining next year with crude oil output predicted to decrease by 2 million tons compared to 2017. Meanwhile, the mobilization of capital for investment and development may meet difficulties and revenue from import tax collections will decrease as a result of the tariff cut.
According to Phuong, if the mining industry did not decline in 2017, i.e if it had grown even zero percent, the GDP growth rate in 2017 would reach 7.24 percent. An analyst commented that the development targets projected by the government, including the GDP growth rate of 6.5 percent, budget overspending at 3.7 percent of GDP and inflation rate at below 4 percent, shows that the quality of growth will be a top priority. He said that if the government does not put the GDP growth rate a top priority, it will focus more on long-term solutions to restructure the economy for more sustainable growth in the future. Stressing that Vietnam needs to strive for sustainable growth, Nghia said the priority for now is settling problems in public investment, improve the performance of state-owned enterprises and reform the economic sector to allocate resources more effectively. According to Nghia, other countries obtained high GDP growth rates before they reached income per capita of $2,000 per annum. But when the goal was reached, the GDP growth rate slowed down.
