Workers manufacture mechanical tools at the Japan-invested Kyouwa company, based in the Long Hau industrial park of the southern province Long An (Photo: VNA)Hanoi (VNS/VNA) - The Vietnam Institute for Economic and Policy Research (VEPR) has predicted Vietnam’seconomic growth would accelerate in the third quarter and then reach 7.17 percentthe last quarter to hit the Government’s target of 6.6 to 6.8 percent for thefull year.
In a macroeconomic report presentedon July 11, the VEPR said the country’s economy grew at 6.71 percent in the secondquarter of 2019, down from 6.79 percent in the first quarter. The institute forecast Vietnam's economic growth is likely to reach 6.96 percent in 2019.
According to the report, in the firstsix months of the year, social investment reached 822.9 trillion VND (35.47billion USD), up 10.3 percent compared to the same period in 2018.
VEPR Director Nguyen Duc Thanh saidthat despite the expectation that the US-China trade war would stimulate theflow of capital into the country, the inflow had not really happened.
The 9.7 percent rise in FDI,compared to 8.5 percent in the same period last year, still lagged behindthe investment poured into the non-state sector.
However, the FDI sector still playeda crucial role in economic growth through exports.
More than 1,700 new FDI projectswere licensed in the first half of 2019 with total registered capital of about7.4 billion USD, down 37.2 percent from last year.
The manufacturing and processingsector attracted 73.4 percent of the newly registered capital.
China was still Vietnam’s biggestinvestor with the newly registered capital of more than 1.6 billion USD,followed by the Republic of Korea, Japan and Hong Kong.
“However, without a seriousselection, FDI enterprises from China may bring potential risks of outdatedtechnologies, negative environmental impacts and workingconditions," said Thanh. "This will adversely affect Vietnam’sinstitutional reforms as it signs new-generation FTAs."
To meet the requirements and takeadvantage of the EVFTA (EU – Vietnam Free Trade Agreement), which wassigned in late June, the report urged the Government to reassess incentives forFDI enterprises – including taxes and land rent reductions – togive them equal standing with domestic firms and ensure the quality ofFDI.
Vietnam is expected to face bothchallenges and opportunities after joining EVFTA, which requires thecountry to improve labour conditions, environmental standards and intellectualproperty rights.
In the second quarter, some 38,000companies were established, creating more than 330,000 new jobs.
The exchange rate of VND to USD incommercial banks fluctuated widely during the quarter and increasedsignificantly in May.
According to finance expert Can VanLuc, the exchange is becoming more stable thanks to flexible mechanisms fromthe State Bank of Vietnam and strengthened foreign exchange resources. Theexchange rate is only expected to fluctuate within a band of 1.5 to 2 percentfrom now until the end of the year.
Inflation rose to 2.65 percent, thelowest level in the last three years. However, it is predicted toincrease in the near future following increases in foodprices, education-related expenses and fluctuating energy prices.-VNS/VNA
In a macroeconomic report presentedon July 11, the VEPR said the country’s economy grew at 6.71 percent in the secondquarter of 2019, down from 6.79 percent in the first quarter. The institute forecast Vietnam's economic growth is likely to reach 6.96 percent in 2019.
According to the report, in the firstsix months of the year, social investment reached 822.9 trillion VND (35.47billion USD), up 10.3 percent compared to the same period in 2018.
VEPR Director Nguyen Duc Thanh saidthat despite the expectation that the US-China trade war would stimulate theflow of capital into the country, the inflow had not really happened.
The 9.7 percent rise in FDI,compared to 8.5 percent in the same period last year, still lagged behindthe investment poured into the non-state sector.
However, the FDI sector still playeda crucial role in economic growth through exports.
More than 1,700 new FDI projectswere licensed in the first half of 2019 with total registered capital of about7.4 billion USD, down 37.2 percent from last year.
The manufacturing and processingsector attracted 73.4 percent of the newly registered capital.
China was still Vietnam’s biggestinvestor with the newly registered capital of more than 1.6 billion USD,followed by the Republic of Korea, Japan and Hong Kong.
“However, without a seriousselection, FDI enterprises from China may bring potential risks of outdatedtechnologies, negative environmental impacts and workingconditions," said Thanh. "This will adversely affect Vietnam’sinstitutional reforms as it signs new-generation FTAs."
To meet the requirements and takeadvantage of the EVFTA (EU – Vietnam Free Trade Agreement), which wassigned in late June, the report urged the Government to reassess incentives forFDI enterprises – including taxes and land rent reductions – togive them equal standing with domestic firms and ensure the quality ofFDI.
Vietnam is expected to face bothchallenges and opportunities after joining EVFTA, which requires thecountry to improve labour conditions, environmental standards and intellectualproperty rights.
In the second quarter, some 38,000companies were established, creating more than 330,000 new jobs.
The exchange rate of VND to USD incommercial banks fluctuated widely during the quarter and increasedsignificantly in May.
According to finance expert Can VanLuc, the exchange is becoming more stable thanks to flexible mechanisms fromthe State Bank of Vietnam and strengthened foreign exchange resources. Theexchange rate is only expected to fluctuate within a band of 1.5 to 2 percentfrom now until the end of the year.
Inflation rose to 2.65 percent, thelowest level in the last three years. However, it is predicted toincrease in the near future following increases in foodprices, education-related expenses and fluctuating energy prices.-VNS/VNA
VNA
