Thursday, July 1, 2004
Vietnam GDP rises 7% in first-half of 2004
Reuters Hanoi, July 1
Vietnam's gross domestic product (GDP) expanded by seven per cent in the first half of 2004, but high inflation left the outlook for growth uncertain, state media said on Thursday.
The rate of expansion in the first half was running below the government's full-year growth target of 7.5 per cent to eight per cent.
While key economic indicators were rising, an unexpected surge in oil prices had made economic growth difficult to project, Le Dang Doanh, a Vietnamese economist, said in an article in Thursday's state-run Lao Dong (Labour) newspaper.
Increased oil prices have raised the cost of traded goods and services, a burden for Vietnam's economy, despite its crude exports, given its heavy dependence on the value of trade.
"It is certain what our economy is facing as it is a country in which the total export-import value exceeds up to 10 per cent of its GDP," Doanh said, adding China's fast economic growth in the past six months had contributed to an increase in global prices.
In the first six months, Vietnam's industrial and construction sector was estimated to have grown 10 per cent from a year earlier, the Vietnam Economic Times said.
The services sector expanded seven per cent and the agriculture sector by two per cent, the newspaper said, quoting a report by the General Statistics Office (GSO).
The Southeast Asian country's GDP grew 7.24 per cent between 2003 and 2002. The economy expanded 6.9 per cent in the first half of 2003.
The GSO did not provide the GDP value. The government is expected to release full GDP data this week.
The government has said the consumer price index rose 7.2 per cent between the end of June and December 2003, and inflation in the 12 months ended June was 8.3 per cent, compared with its annual target of keeping inflation at five percent.
High inflation so far this year has been driven by a 14.5 per cent increase in food prices since last June in the aftermath of the bird flu epidemic. Food prices account for 46.7 per cent of Vietnam's price basket.
The Finance Ministry has forecast inflation for the whole of 2004 at nine per cent, well above current interest rates on 12-month deposits in the Vietnamese dong of seven per cent to eight per cent.
© HT Media Ltd. 2004.