Southeast Asia

Jan 4, 2006

Vietnamese economy grows 8.4%

HANOI - Vietnam's gross domestic product (GDP) rose to 8.4% in 2005, its highest level in the past nine years.

This achievement is even more significant in light of the many difficulties and challenges the country faced during the year.

In 2005, Vietnam was hit by 10 tropical storms and flash floods as well as the Avian flu, which at any time could still become a human pandemic. Coupled with such trying events was the upheaval in the global economy, especially increasing oil prices.

The country's economic structure is rapidly changing as is evident in the GDP's increased ratio of industry over agriculture. Industrial value during the year increased 17% with the value performed by

the non-state sector growing by 24.6%, foreign invested sector 20% and the state sector 9%.

During the period, the total goods and service revenue increased by 20.3% compared with 2004's peak.

In 2005, Vietnam posted US$32 billion in export turnover, an increase of 21.5% over 2004, or 2.2 times higher than 2000.

Vietnam attracted more than US$5.8 billion in foreign direct investment these past 12 months, an increase of 25% compared with 2004 or 29% over the set target.

Total development investment in society as a whole accounted for 38.2% of GDP while the production value of agro-forestry and fisheries increased by 5.2%.

The consumer price index increased by 7.6%, 1.1% higher than the set target but 1.2% lower than 2004 (8.8%).

Some 1.6 million people found employment last year and the poor household rate dropped to 7% from 8.31% in 2004.

Despite all these achievements, Vietnam's economic and technological development level was lower than many other regional countries.

Vietnam's growth rate did not match its potential as development depended heavily on capital investment, not on in-depth development factors, while social labor efficiency increased slowly and at a low level.

The new year will bring many opportunities and challenges as this is the first of the new five year plan (2006-10).

Over the next five years, Vietnam will work on many measures in order to achieve an average GDP of 8% that will eliminate it from the list of low-income developing countries.

The Communist Party and government have planned many measures to help the country achieve rapid and sustainable socio-economic development, with special emphasis on in depth and high quality development.

While encouraging economic and cultural development, Vietnam will also try to solve urgent social issues such as job creation and environment protection.

Vietnam will also continue reform in administration and the banking system in its bid for World Trade Organization membership and international integration.

The country will also seek measures to put the inflation rate under control and adopt flexible financial policies.

(Asia Pulse/VNA)

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