HANOI--Vietnams economic growth accelerated in 2014, driven by strong exports, as the countrys inflation hit the lowest level in decades, government data released Saturday shows. Gross domestic product grew an estimated 5.98% this year, faster than last years 5.42% expansion and higher than the governments growth target of 5.80%, the General Statistics Office said. Advertisement Vietnam has been struggling to revive its economic growth in recent years, with the banking system facing high levels of nonperforming loans while domestic demand has remained weak. But a steady inflow of foreign direct investment has helped the country boost its exports, especially shipments of smartphones and tablet computers, many of them made by Samsung Electronics Co., which has latched onto Vietnam as a major production base. This dependence on foreign investment worries some economists, though. Looking at the figures, we can say that the economy is recovering, but not in a sustainable manner, Le Tham Duong, an economist with the Banking University of Ho Chi Minh City, told The Wall Street Journal. Mr. Duong said the country hasnt been able to work out an effective way to clean up bad debt in the banking system. The GSO said exports in 2014 are expected to rise 13.6% to $150 billion, while imports will likely rise 12.1% to $148 billion. Exports by companies with foreign direct investment accounted for 67.7% of Vietnams total exports in the year and were up 15.2%, it said. However, the GSO said this week that this years inflation was 1.84%--the lowest level in decades. It said lower oil prices have led to decreases in prices of other products, but Mr. Duong said aggregate demand remains weak. Domestic retail sales of goods and services rose by only 6.3%, for instance--lower than in some previous years. The industrial production index rose 7.6% in the year. GDP growth in the fourth quarter was 6.96%, faster than a rise of 6.07% in the third quarter, the GSO said. Growth in the third quarter was reduced from an earlier estimate of 6.19%. Vietnam traditionally releases data before the end of the reporting period. The government said it would continue to prioritize macroeconomic stability next year, targeting a GDP growth of 6.2% and aiming to keep inflation at 5.0%.
Posted on: Sun, 28 Dec 2014 01:37:31 +0000
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