All signs point to growth for 2015

The General Statistics Office (GSO) reports the country’s GDP grew by 5.98% for calendar year 2014 –  the highest growth rate since 2011.

In other positive economic news, the consumer price index (CPI) declined sharply for the year while the nation’s export turnover has continued its upward trek.

Nguyen Bich Lam, GSO General Director granted an exclusive interview to a Radio the Voice of Vietnam (VOV) reporter to discuss the economic results for 2014 along with upcoming challenges for 2015.

VOV: What is your assessment of the national economy for 2014?

Mr. Lam: The Vietnamese economy has shown positive signs with GDP surpassing the 5.8% benchmark for the year. There has been general optimism among leading economists for the economy as a whole and the agricultural sector in particular.

The year 2014 was a bumper year with the rice output having increased to a record 955,000 tonnes. Meanwhile, the seafood, construction and industrial sectors experienced strong growth as well. Most notably, the manufacturing sector experienced substantial growth of 98%.

The CPI in December grew by 1.84% from a year earlier. Meanwhile the unemployment rate has remained low with the economy humming right along generating in excess of one million jobs this year.

VOV: Apart from Vietnam’s economic achievements this year, could you elaborate on the challenges faced by the national economy?

Mr. Lam: Although inflation has been curbed, it continues to be affected by other factors such as prices of materials, which are beyond the control of the government. Vietnam is an open economy, which means that world trade heavily influences the inflation rate.

Currently, Vietnam imports up to 91.2% of production materials from other nations. Therefore, the fluctuations in world prices directly impact prices in the nation’s economy.

In addition, despite the fact that businesses’ production activities show signs of recovery, there remain challenges. Notably, when the ASEAN Economic Community (AEC) comes into effect in 2015, there will be tougher competition with enterprises within the ASEAN bloc.

Moreover, the country has recently signed a number of free trade agreements and has to implement commitments within these FTAs. There is widespread confidence with the economic restructuring process, however it has been implemented much too slowly and we need to pick up the pace.

Vietnam’s labour productivity, which is the most important ingredient to improving competitiveness of the national economy, also remains much too low. In recent times, the nation’s labour productivity has been improving but remains among the lowest in the region.

This is the number one challenge for the national economy in 2015 and the key to economic sustainability.

Reporter: Could you please elaborate further on Vietnam’s economic prospects for next year amid a decline in the price of crude oil?

Mr. Lam: Oil is the strategic commodity that offers enormous potential to propel the country’s economic growth. The decline in the oil price is great news for the national economy as it leads to an across the board reduction of manufacturing costs, thus stimulating economic growth and competitiveness.  

Reporter: Thank you.

VOV