Socialist Republic of Vietnam

Ha Noi, Jan. 1 (VNA) -- The picture of Viet Nam's national economy looks brighter as the year is drawing to an end. The country becomes a trust-worthy destination for foreign investors.

It has managed to steer its national economy through severe natural calamities, the challenges of a global economic slowdown in the wake of the events of Sept. 11 and sharp drops in prices of farm produce to register a seven percent gross domestic product (GDP) growth rate in 2001.

The industrial proportion makes up 38 percent of Viet Nam's GDP; the service sector, 39 percent; and the agriculture, forestry and aqualculture sector, 23 percent in 2001. The proportions were 36.6 percent; 39 percent and 24.3 percent, respectively, in 2000.

Of the seven percent GDP growth rate this year, the industrial and construction sector contributed 3.8 percent; the service sector, 2.7 percent; and the agriculture, forestry and aqualculture sector, 0.5 percent.

The outstanding contribution by the industrial sector to both the GDP growth rate and GDP structure in 2001 marked a milestone in economic restructuring of the country as outlined by the Resolution of the ninth Party Congress.

The industrial sector posted an annual growth rate of 14.5 percent in 2001, surpassing the target of 13-14 percent set by the National Assembly.

Production value of the State-owned and foreign-invested sectors made up more than 40 percent and almost 36 percent of the total, respectively.

The non-State industrial sector registered an annual growth rate of 19.5 percent and the foreign-invested sector, 13.8 percent in 2001.

This year marked the shifting of the industrial production sector from processing to manufacturing.
The production value of the agriculture sector grew 4.1 percent, year-on-year, in 2001 and its contribution to 2001 GDP increased 2.6 percent as compared with 2000.

The major achievement of the agriculture, forestry and aquaculture sector this year was its better adaption to a market economy.

A number of localities replaced high-yield grain strains with high economic value ones. Although Viet Nam's 2001 food output was lower than last year's volume, it ensured food security throughout the country, even in natural calamity-stricken localities. This year, the country exported a greater volume of rice as compared to 2000.

The aquaculture sector netted an estimated 2.3 million tonnes in 2001 or a 4.1 percent year-on-year increase. The proportion of shrimp increased to 10.4 percent from 8.6 percent in 2000. Meanwhile, the proportion of fish dropped during the year but still registered an annual five percent growth rate.

This year's aquaculture export revenues were USD 200 million higher than the annual target to USD 1.8 billion and represented a 15.5 percent year-on-year increase.

Total investment funded by the State budget in 2001 was estimated at VND 24.4 trillion (USD 1.63 billion) or 1.6 percent higher than the annual target. The amount included VND 15.6 trillion from the central budget and VND 8.8 trillion from local budgets.

A number of investment projects, including the Ya Ly and Da Mi hydro-power plants, the Phu My 1 thermal power plant and the upgrade or construction of large-scale bridges, ports and communication networks, were put into operation, thus raising production and service capacity of the national economy.

The country granted licences to 411 foreign invested projects with a combined registered investment of USD 2.07 billion, year-on-year increases of 32 percent and 61.5 percent in terms of project number and capital, respectively. Almost 80 percent of the projects with a total investment accounting for 82.5 percent were in the industrial sector.

Total retail sales of goods and services of the whole year were estimated at VND 238.5 trillion in 2001 or a 8.7 percent year-on-year increase.

Viet Nam welcomed 2.3 million foreign tourists in 2001 or a year-on-year increase of 8.4 percent. Revenues from the tourism sector rose 20 percent, year-on-year.

The country was to register an estimated export turnover of USD 17.6 billion this year, USD 1.76 billion lower than the annual target.

Of the figure, earnings from exports of goods were estimated at USD 15.2 billion, USD 1.56 billion lower than the target, and those from exports of services at USD 2.4 billion, USD 200 million less than the target.

The estimated surplus import value this year was USD 300 million.

Consumer price index remained unchanged compared to 2000.

The target of State budget revenue collection this year has been achieved. The amount was 7.4 percent year-on-year increase.

The national economy in 2001 revealed shortcomings and weaknesses, namely its unstable and unsustainable growth and poor competitiveness of local goods and services.

In order to improve the situation, Viet Nam is required to attach its production to market demands, accelerate economic restructuring, particularly in rural areas, and further simplify its administrative procedures.

State budget revenue collection will be unstable in 2002 if it continues relying on revenues from import-export activities and the oil and gas industry, warned finance experts.

The purchasing power of the people was low throughout the year. It is the second consecutive year that Viet Nam registered a falling consumer price index. Therefore, the country should work out more effective measures to raise people's purchasing power in the future.--VNA