Industry & export remain to be force of growth

(Vietnam Logistics Review) There has been a downward trend in quarterly GDP growth. However, economic experts found industry and export have had good developments and remain to be force of economic growth in 2018.

Maintain the growth

According to reports from the General Statistics Office of Vietnam, there was an improvements in economic situation in the second quarter: an increase of 6.91% yearover-year, increasing the growth in the first 6 months to 7.08% (7.45% increase in the first quarter; 6.79% in the second quarter) - the highest increase in 6 months since 2016.

The good result thanks to positive impacts from outside and inside factors in the economy: the positive blooming-back of the world economy, high prices of oil and other minerals that facilitate production activities, export and foreign investment attraction (indirect and direct) are factors from outside; business environment improvements, consuming increase, remarkable growth of the industry- especially manufacturing and processing ones, good regional growth are factors from inside.

According to reports from the Ministry of Industry - Trade, in the first 6 months of 2018, production index of the industry sector had an increase of 10.5% year-overyear (12.9% in the first quarter; 8.4% in the second quarter)- higher than the increase of 7% year-over-year in 2017. The processing and manufacturing industry has remained in leading position with the increase of 12.7%, contributing 9.7 percentage points in the total increase. Other sectors have maintained the growth, except the mining industry with the decrease of 1.3% (due to the decrease of 5.7% in crude oil and gas mining) that made 0.2 percentage points decrease.

Representatives from the Ministry of Industry- Trade said in the first 6 months of 2018, the national export turnover estimatedly reached USD 113.93bn- an increase of 16% year-over-year. There were 20 products reaching the turnover of over USD 1bn. The top positions belonged to phones of all kinds and spare parts (2USD 2.5bn; computers, electronic products and spare parts (USD 13,45bn); textile and garments (USD 13.42bn); machines, devices, tools and accessories (USD 7.8bn); footwear (USD 7.79bn). The group of agricultural and aqua products had an export turnover of estimated USD 13.45bn- an increase of 9.5% year-over-year in 2017.

In the group of materials and minerals, the turn-over reached estimatedly USD 2.19bn- a decrease of 10.8% year-overyear. According to ideas from the Ministry of Industry- Trade, the export of materials and mineral took advantages from the recovering of crude oil price (over USD 70 a barrel in 2018). The price-increase factor helps increase USD 466m of export turnover, while the decrease in export quantity made the turn-over of this group reduce by USD 731m.

In the group of industrial processing products, the turn-over reached estimatedly USD 93.3bn- an increase of 18.5% year-over-year in 2017. Products that contributed in the export growth included cellphones and spare parts, computers, electric products and spare parts, textile and garments, machines and spare parts, footwear, wood and wood products… Goods- export mechanism has had positive changes: the export amount of raw material and minerals is gradually decreasing, accounting for 1.9% of the total turnover (2.5% in 2017); the export amount of industrial processing products, agricultural and aqua-products is improved: 81.9% and 11.8% (compared to 80.2% and 12.5% in 2017).

Vietnam has made good use of tariff incentives in FTAs to expand export markets: the increase is going on at key markets and there have been export to potential markets as India, Iraq, Ukraine, Australia and Russia…

It is a good indication that industrial production activities and export activities from local enterprises has had good improvements in term of quantity and quality as well compared to those of foreign ones. Besides, export structures have had positive changes: reducing the export of mineral and raw materials and increasing industrial services with high values.

Fulfill the export targets

Japan approved CPTPP Agreement and Vietnam are trying its best to be one of the six countries that first approved the Agreement at the end of this year. This will be a great opportunity to expand our export markets this year and in the coming years.

In the periodical Governments’ meeting at the beginning of July, 2018, the Minister of Industry- Trade Tran Tuan Anh said, in order to reach the GDP growth targets with the Government, the Ministry has focused on tasks for the last six months this years. Particularly, it will keep improving mechanism and business environment, arousing sources to serve developments in the field of industry. Together with these movements, the Ministry will also reduce business investment environment, simplify administration procedures and improve the quality of online public services. Besides, the restructuring of the Industry- Trade, especially restructuring the industry for remarkable changes, is being focused for better competition abilities of the economy. It will keep studying market changes for on-time adjustments and supports to enterprises in terms of having optimal production approaches, making good use of FTAs and positively dealing with protection trends and technical barriers from other markets in the world. It will also carry out policies to make good use of opportunity and reduce negative effects from integration.

In the field of export, according to the study of situation and positive growth rate, Minister Tran Tuan Anh said the target of 10% growth in the field of export is completely feasible.

Export market fiscal space keeps growing thanks to FTAs and other agreements. For example, Japan approved CPTPP Agreement and Vietnam are trying its best to be one of the six countries that first approved the Agreement at the end of this year. This will be a great opportunity to expand our export markets this year and in the coming years.