Economic highlights in February

Tuesday, 2016-03-01 17:17:02
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The Vietnamese economy is forecast to grow stably at nearly 7% in 2016.
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NDO – In February, as the country celebrated the Lunar New Year (Tet), the economy continued to grow positively with three highlights: even growth in all sectors; a boom in foreign direct investment (FDI) attraction and resumption of businesses; and a trade surplus and sharp increases in total retail sales.

Even grow in all sectors

Over the past two months, growth has been seen in agriculture, industry and services.

Despite severe cold weather in the north, drought and seawater intrusion in the central and southern regions, the year-on-year rice cultivation for the winter-spring crop reached 100.2% nationwide while the number of cows, pigs and poultry increased by 0.5-1%, 3-3.5% and 8-8.5% respectively. The only fall of 0.2% was seen in the number of buffalos. The fisheries yield climbed by 3.1% (aquaculture grew by 2.2% and fishing extraction rose by 3.8%).

Tra fish raising continued to face difficulties due to sharp decreases of offspring prices which were the lowest since 2010. The country’s rice export over the past two months and in the first half of the year was forecast to rise (in January rice export increased by 56.7% in volume and 46% in value) thanks to rising demand from the Philippines, China, Indonesia, Malaysia and Africa, while Thailand cut down rice production to develop fruits and vegetables for higher benefits.

The index of industrial production (IIP) in February was estimated to grow by 7.9% year on year and fall by 22.3% month on month because of the Tet holiday. The IIP over the past two months increased by 6.6% year-on-year. The inventory of the processing and manufacturing industry rose by 8.9% year-on-year as of February 1 and was lower than the same period last year. The number of employees in industrial establishments rose by 6.2% year-on-year as of February 1.

Passenger transportation over the past two months has increased by 7.8%, serving 28.5 billion passengers, a 7.6% year-on-year rise. Goods transportation has grown by 6.7%. The total volume of retail goods and revenue from consuming services in February was estimated to have reached VND288 trillion (US$13 billion), a 6.8% year-on-year rise and for the past two months increasing by 9.7%. Notably, there were no shortages of goods, price fevers and speculation, except price rises of vegetables due to prolonged cold weather before the Tet festival.

The number of international visitors to Vietnam in February increased by 3.5% over January and 20% year-on-year. That of the past two months was estimated to reach 1,638,670, a 16% rise. Sharp increases were seen in the volume of international visitors who came by both air and land from most of markets around the world. The number of local tourists was estimated at 14,2 million, including 6.8 million staying guests. The total revenue from tourists has increased by 19% year-on-year.

Boom of FDI attraction and businesses’ resumption despite difficulties

From the beginning of the year to February 20, the country attracted 291 newly-licensed projects with the total registered capital of over US$1.9 billion, a 96.6% and 167.5% rise in the number of projects and capital respectively over the same period last year.

Meanwhile, 137 licensed projects received added capital of US$989.3 million, making the total registered capital of newly-licensed and capital-supplemented projects reach over US$2.8 billion, a 135% year-on-year increase.

The implemented FDI was estimated to reach US$1.5 billion, a 15.4% increase. The processing and manufacturing industry accounted for 71.2% of the total registered capital. Hanoi, for the first time since its boundary expansion in 2008, has attracted the most registered capital in newly-licensed FDI projects with US$242.4 million, accounting for 12.7% of the country’s registered FDI capital, among 32 centrally-governed provinces and cities. Singapore was the biggest investor out of 31 nations and territories with newly-licensed projects in Vietnam at US$435.2 million, accounting for 22.8% of the total investment capital.

In the first two months of the year, there were 13,904 newly-established businesses with the total registered capital of VND113 trillion, a 1% rise in the number of newly-established businesses and a 45.8% increase in the registered capital compared to the same period last year. The newly-established businesses also increased by 44.4% in the average registered capital and were expected to raise the number of new jobs by 0.7% yearon-year. The number of businesses resuming operations was 7,416, a 69.5% rise over the same period last year while the number of businesses suspending the operation reached 16,471, a 17.3% year-on-year increase.

Trade surplus, sharp increase of total retail sales and slight CPI rise

The value of exports in January reached US$13.363 billion while that of imports were US$12.598 billion, making a US$765 million trade surplus.

The turnover of exports in February was estimated at US$10.3 billion, a 22.9% month-on-month decrease and that of imports was estimated to have reached US$10.2 billion, a 19% fall, making the trade surplus in January approximately US$100 million.

Over the past two months, the value of exports was estimated at US$23.7 billion, a 2.9% year-on-year rise, in which the local sector contributed around US$7.1 billion, a 4.2% rise, and the FDI sector (including crude oil) made US$16.6 billion, a 2.3% increase.

The US has been the biggest importer with US$5.1 billion in value, a 15.5% year-on-year rise. The volume of imports was estimated at US$22.8 billion, a 6.6% fall. Decreases were seen in most of large markets, including China (5.6%), the Republic of Korea (4.8%), ASEAN (7.6%), Japan (9.5%), the EU (26.6%) and the US (4.2%). The trade surplus was US$865 million, in which the local sector earned nearly US$2.1 billion surplus and the FDI sector (including crude oil) had a US$2.9 billion deficit.

February’s consumer price index (CPI) increased by 0.42% month-on-month, a 0.42% rise over December 2015 and a 1.27% year-on-year increase. The average CPI of the past two months rose by 1.03% year-on-year. Inflation climbed 0.56% in February over the previous month and 1.93% year-on-year. The inflation in the first two months of the year increased by 1.82% compared to the same period last year.

Gold prices in February climbed by 3.02% over the previous month, a 2.78% rise over December 2015 and a 5.42% year-on-year fall. Notably, the gap between local and international gold prices has been lowered to approximately VND350,000 for three years as required by the National Assembly and promised by the Governor of the State Bank.

The exchange rate of the US dollar in February decreased by 0.64% month-on-month, a 0.46% fall over December 2015 and a 4.82% year-on-year increase. The central exchange rate saw fluctuations and became closer to the market.

According to foreign organisations and press, the Vietnamese economy is forecast to grow stably at nearly 7% in 2016, helping the country become one of the fastest growing economies in the world and the second fastest growing economy in Asia. The growth stimulus is assumed to come from improvements in the investment environment, the recovery of the real estate market and the increasing local demand, exports, productivity, technology and FDI.

NGUYEN MINH PHONG - Translated by NDO