GDP growth of 3.82 percent in Q1 is a miracle: official

Vietnam’s GDP growth rate of 3.82 percent in the first quarter of 2020, a record low since 2011, is still a miracle amidst a global economic recession, an official has said.

In an interview with Dau tu (Vietnam Investment Review) newspaper, Duong Manh Hung, Director of the System of National Accounts Department under the General Statistics Office (GSO), said the COVID-19 outbreak has been causing considerable and unprecedented impacts on economic activities, travel and lives among people around the world. As an open country with an integrated economy, Vietnam has also been under great pressure.

Aside from the pandemic, the country has also been affected by adverse weather conditions, along with early and serious saltwater intrusion, which have strongly impacted crops. Meanwhile, animal farming still faces African swine fever which is not yet under full control and avian influenza which has appeared in many localities, Hung said.

He added the increased fines for drink driving since the start of the year have also affected alcoholic beverage producers, as well as catering and entertainment services.

Facing such unprecedented difficulties, the economy grew by only 3.82 percent in Q1, the slowest Q1 growth pace since 2011. This rate is also much lower than the 6.52 – 6.77 percent originally forecast.

However, global economic expansion has slowed, and many big economies have grown at zero percent or even shrunk, so Vietnam’s growth rate of 3.82 percent could be considered a miracle, Hung said.

Pointing out the industries that have helped the Vietnamese economy sustain growth, the official said some service sectors have maintained stable growth like finance – banking, insurance, information and communications, health care, and social assistance. Notably, finance, banking and insurance services increased 7.19 percent, contributing 0.33 percentage points to the overall growth.

For the second quarter, even if the COVID-19 pandemic continues, these service sectors will continue to post impressive growth and remain the drivers of the economy, he said.

The GSO predicted that if the pandemic was successfully controlled in Q2, this year’s GDP could grow by 5.32 percent, while the rate could stand at 5.05 percent if it lingered on to Q3, he noted, adding that the office hasn’t considered the worst scenario that COVID-19 will remain a problem until Q4.

Hung stressed that it will be extremely difficult to achieve the growth target of 6.8 percent for 2020 amidst the pandemic, animal diseases, drought and saltwater intrusion.

To do so, even if the coronavirus outbreak is contained in Q2, the Vietnamese economy must rise by 8.57 percent and 9.23 percent in the next two quarters – the highest in many years. So this year’s target is most likely unachievable, according to the GSO official.

It would still be a miracle if the country could record GDP growth of 5 percent this year, he added.