REVIEW
of
FINANCE -
Apr. 2018
3
construction and services. The industrial and
construction sector seemed to overwhelm the
agricultural and service sectors in the period
2014-2016. In particular, the growth rate of the
industrial sector was on the upward trend, in
contrast to the trend of decreasing growth rates
in the agricultural - forestry – fishery sector. Since
mid-2016, services have tended to be more than
industry - construction and agriculture – forestry
- fishery. In general, agriculture - forestry - fishery
was the strength of our country, but investment
in this sector accounts for only 5.5% of the total
investment of the society. In 2016, this sector
increased by only 1.3%, the lowest since 2011. In
2017, although increasing to 2.9% in GDP, this
sector was still dealing with competition, price
falls and lack of consumer markets. The growth
of the agricultural sector is potentially risky due
to its dependence on the weather. The reduction
of agriculture-forestry-fishery sector in GDP has
somehow influenced the employment situation
in our country, making it difficult for people in
finding new jobs when shifting from agricultural
jobs to more skillful jobs in the industrial sector.
The industry’s growth rate was on the
downward trend, from an average of 14.3% per
annum in the 2006-2010 period, down to 10% per
annum during the 2011-2015 period of, 7.57% in
2016 and in 2017 increased to 7.85% over the
same period in 2016. Vietnam ranked 101 out of
143 countries in terms of value per capita added
in the processing and manufacturing industry.
These are concerns
when Vietnam is only
in the early stages
of industrialization.
Due to the relatively
large share of the
industrial sector, the
slow improvement of
the growth potential
in this region would
also affect the general
growth prospects of the
economy. Vietnam’s
industrial growth was
slow and unstable,
as reflected in the
following areas:
high. In the 2011-2015 period, public debt
increased by 22% per year on average, which
was 3.5 times faster than the averaged GDP
growth rate of 5.9% per year in the same period.
By 2016, public debt/GDP ratio reached 63.7%,
very close to the 65% threshold requested by the
National Assembly. In 2017, GDP of 6.81% and
public debt accounting for 62.6% of GDP were
still below the limits. However, budget deficit,
investment in some difficult/irrecoverable
projects and debt reversal created a significant
impact on the ability of debt payment. In the
opposite direction, GDP growth improved
slowly, resulting in difficulties in state budget
revenues and a reduction in loan balances,
hindering the feasibility of implementing public
investment projects.
Adjusting credit growth targets would help
boost economic growth in the short term, but
might bring back the risks for credit institutions
and macro economic stability. In particular, as
there was a slow improvement in the efficiency
and absorption of credit in the economy, the
problem of high credit growth would likely to
lead to negative impacts on inflation control,
bad debt growth, economic development in the
medium and long term.
Contributions of sectors
The contribution to Vietnam’s economic
growth was reflected in all three sectors:
agriculture - forestry - fishery, industry -
GDP growth
Average 2007 - 2011
Average 2012 - 2015
9 months of 2017
Average 1990 - 2006
FIGURE 1. VIETNAMESE GDP GROWTH IN THE PERIOD OF 1990-2017 (%)
Source: General Statistics Office
