Motivation grows from now to end of 2019

	Vietnam’s economy grows robustly, but risks intensify
	Nine-month GDP grows 5.93% year on year
	HCM City economy grows 7.47%

In recent years, the Government has made great efforts to administer the exchange rate proactively, flexibly and effectively. Photo: H.K

Positive economic changes

In the first half of the year, according to the assessment, the socio-economic situation hasseen many positive changes, except for the struggling agricultural sector. In particular, the remarkable point is that despite the increase in the prices of some essential goods, the macro economy has maintained stability and inflation is low.

According to the report by the Government, the macro economy continued to be stable, the average consumer price index in the first 5 months increased by 2.74% over the same period last year.This is the lowest increase in the first 5 months of the year forthe last three years. Agricultural, forestry and fishery production has developed stably; industrial production increased significantly, especially processing and manufacturing industries played a key role leading the overall growth of the whole industry with the May production index hitting the highest level in the past 5 years (estimated to increase by 10% compared to the same period last year, in which the mining industry decreased by 1.5% while the processing and manufacturing industry increased by 11.6%).

According to the Ministry of Planning and Investment, industrial production in the first five months of 2019 achieved a strongincrease thanks to positive production results in May of processing, manufacturing, electricity distribution and water supply sectors, as well as the treatment of waste and wastewater. In particular, processing and manufacturing industries play a key role leading the overall growth of the whole industry. Notably, the manufacturing of electronic products, computers, and optical products in May started to recover after two consecutive months of negative growth.

According to the Government's assessment, in the first half of 2019, the start-up environment also recorded many positive signs when newly established enterprises increased and the wave of start-ups continued to be the source of capital mobilization for the economy.

In the last five months, there were nearly 54,000 newly registered enterprises – the highest number of registered enterprises in the last five years. If taking into account both newly registered and additional registered capital, in the first five months of this year, it is estimated that enterprises have added registered capital to the economy of nearly 1.7 million billion VND. Besides the number of newly established businesses, the market has seennearly 20,000 businesses resume operations, while the number of enterprises returning to operation increased by 48.1% over the same period last year, bringing the total number of newly registered enterprises and enterprises resuming operations in five months to over 73,600 enterprises.

Regarding the difficulties of the agricultural sector, according to Nguyen XuanCuong, Minister of Agriculture and Rural Development, the global economy continued to decline, so the agriculture sector developed a plan for economic growth in the agricultural sector of 3% and 42% for export. Until now, the growth of the fisheries sector is 5.2%, while the forestry sector grows by more than 5%. Particularly, traditional agriculture, including animal husbandry and farming, is difficult.

Specifically, the most difficult cultivation area is the price of agricultural products of industrial crops, while animal husbandry is particularly difficult to raise pigs due to the spread of African swine flu. According to the assessment of the Government, African swine flu is the biggest difficulty facingthe livestock industry, significantly affecting the growth of the industry, income and life of farmers. Consumption output and pork prices fell in the early months of the year.

In addition, droughts appeared in the South Central and Central Highlands regions, which significantly affected agricultural production and people's lives. The fisheries sector maintains a good increase in output but also faces increasing competition from countries with the same products, such as pangasius exported to the US and China.

More motivation for 2019

Commenting on the motivation from the macro economy, Vu TienLoc, Chairman of Vietnam Chamber of Commerce and Industry (VCCI) said that the latest figures published by the Government show that we are now achieving relatively good macroeconomic stability.

This year may be the 5th consecutive year inflation is curbed below 4%, and with the average basic inflation of the first 5 months of the year at only 1.85%, the inflation target can be met.

“In recent years, the Government has made great efforts to controlthe exchange rate proactively, flexibly and effectively.The Vietnamese currency in the last two years has been among the most stable currencies in Asia, contributing to improving the nation's credibility, despite the enormous pressure from the ongoing US-China trade war,” said Dr. Vu Tien Loc.

However, expert Vu Tien Loc noted that what worries us most is that the speed of institutional reform is still slow and has not yet reached the expected, which will certainly affect the long-term development prospects of the economy.

Talking about the motivation for growth in the future, Minister and Chairman of the Government Office Mai Tien Dung said that there are many motivations for economic growth from now to the end of the year. For example, commercial activities are now very active, purchasing power is very good, consumer services increase 11.6%, currencies and exchange rates remain stable, creating market confidence.

In particular, attracting FDI capital with very good results, by the end of May 2019, has achieved disbursement of 7.3 billion USD, total new registered capital and capital increase and capital contribution to buy shares have increased and reached nearly 17 billion USD, a 69% increase compared to 2018.

Besides, the export sector grew by 6.7% compared to 2018 with a total turnover of over 100 billion USD. In particular, it is worth noting that the export trend of domestic enterprises is higher than that of FDI enterprises when the export of domestic economic sector reaches 30.33 billion USD, up by 11.6%, over the level increase of the FDI sector.

Minister Mai Tien Dung also emphasized the growth motivation coming from industry, when the industry is currently experiencing a high growth rate of 9.4%, though lower than 2018, but this is a higher growth ratethan 2016 and 2017, in which, notably, on June 14, Vinfast Factory will be inaugurated in HaiPhong.The tourism industry in the past 5 months has more than 7.3 million international visitors.

“The Prime Minister's direction is to focus on solving administrative procedures, clearing land, arranging reciprocal capital, increasing public investment disbursement. Moreover, it must create a strong mechanism to attract capital from private enterprises. The Prime Minister proposed many solutions to handle many areas, especially removing difficulties for industry and agriculture, cutting business inspection procedures, directing local leaders to focus on removing problems. For businesses, creating favorable business investment environment and the tasks of all ministries are very carefully assigned. With the drastic direction of the Government’s leaders, the ministries and branches in the localities sticking to the growth target, demanding that target to strive, deploy drastically, complete the tasks of 2019, trust the target 2019 will be achieved,”said Minister Mai Tien Dung.