ASEAN KEY DESTINATIONS
Drought weighs on Vietnam growth
VIETNAM’S annual economic growth slowed to an estimated 5.46 per cent in the first quarter, the slowest expansion for any quarter since January-March 2014, due mainly to the country’s worst drought in 90 years.
Cold spells in the northern region, drought in the central part - including the Central Highlands coffee belt - and salination in the Mekong Delta have affected the industrial and farm sectors as well as exports and imports, the General Statistics Office (GSO) said yesterday in its March report.
The main economic drivers in January-March were industrial and construction sectors, expanding at an estimated pace of 6.72 per cent, followed by a 6.13 per cent rise for the service sector, the GSO said.
In the first quarter, the agricultural sector contracted 2.69 per cent from a year earlier, with rice output in the Mekong Delta dropping 6.2 per cent, or a loss of 700,000 tonnes.
In January-March, Vietnam had a trade surplus estimated at US$776 million, with imports falling 4.8 per cent from a year earlier and exports rising 4.1 per cent. In the first quarter of 2015, Vietnam had a US$2.6 billion trade deficit.
First-quarter growth in Vietnam is usually slower than other quarters due to its long Lunar New Year holiday. The economy had annual growth of 7.01 per cent in the last three months of 2015, the fastest pace since the fourth quarter of 2010.
GSO General Director Nguyen Bich Lam told a news conference that the country is increasingly impacted by the global economy and its exposure “will continue to be high in coming years as Vietnam enters more trade deals” with European and Pacific nations.
Vietnam faces challenges from dry weather and slowing exports to exchange rates and monetary policy risks from potential US Federal Reserve rate hikes and negative interest rates in several countries, Lam said. Growth of industrial output from Vietnam’s booming manufacturing sector, mostly electronics, garments and footwear, slowed to an estimated 6.3 percent.
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