Vietnam GDP growth higher than expected

Ha Noi, Nov. 25 (VNA) -- Viet Nam has posted a Gross Domestic Product (GDP) growth of 6.7 percent against the target of between 5.5-6 percent set for this year and a rise of 15.5 percent in industrial production, from the goal of between 10.5-11 percent.

This unexpected increase resulted from proper investment over the past years, analysts said, explaining investment helped boost production of various economic sectors.

The analysts also attributed the growth to larger sources of capital mobilized for development, including domestic investment capital for socio-economic development accounting for 27.9 percent of GDP or almost 20 percent higher than last year, and disbursed foreign direct investment (FDI) worth around USD 1.6 billion.

The mobilized money was concentrated on major and feasible projects. As a result, nearly 180 projects became operational, including two turbine groups of the Hinh river hydro power plant; the first and second turbine groups of the Yaly power plant; three generators of the Phu My power plant; the first generator of the Ham Thuan-Da Mi power plant; the cement factories of Nghi Son and Hoang Mai; the My Thuan bridge; and the airports of Can Tho and Da Nang.

Higher achievements were recorded in such industries as steel, cement, and construction materials. In the first ten months of this year, Viet Nam's steel and cement outputs surged 17.6 percent and 26.5 percent more than last year, respectively.

The changing structure has helped various leading industrial sectors and export-processing zones emerge. Until now, the mining industry had made up 15 percent of the country's total industrial value; processing industry, 79 percent; and power, gas and water, 6 percent.

This year's power output is expected to reach 24.8 billion kWh against the planned 24.55 billion kWh as a result of the operation of new turbines and expansion of the national grid to different rural regions with an investment of about VND 13,617 billion or VND 3,000 billion higher than 1999.

According to economic experts, annual budget revenues increased by 8.9 percent more than estimated. This allowed the Government to offer tax exemption to boost exports and provide support to imports of petroleum as its prices were on the rise in the world market.

Also this year, combined investment capital from the people rose due to the implementation of the Enterprise Law which resulted in the establishment of about 10,000 businesses with a total registered capital of VND 9,397 billion in ten months.

Though FDI was valued at less than USD 2 billion, FDI for the industrial sector this year surged to 75 percent from 67 percent last year, while the disbursement of official development assistance (ODA) is expected to reach USD 1.69 billion and FDI capital, USD 1.6 billion, experts said.

The Government will accelerate reform of State-owned enterprises and make amendments to provisions in favour of business equitization and development of the co-operative and private economic sectors, according to Minister of Planning and Investment Tran Xuan Gia.--VNA