Vietnam economic growth slows,set to worsen
HANOI - Vietnam's economic
growth slowed to 5.8 percent in 1998 from a revised
figure of 8.2 percent the previous year, a government
report said on Thursday.
The General Statistics Office, in its annual year-end
report, painted a grim picture for the country's
economic prospects in the coming year and said
uncompetitive industry and plummeting foreign
investment inflows bode ill for 1999.
The office revised downwards to 8.2 percent 1997's
earlier GDP figure of 8.9 percent, and an official told
Reuters this was due to changing the method of
calculation to use 1994 as a base. He did not elaborate.
Although GDP growth slowed from recent years --
Vietnam had averaged almost nine percent annually
over the previous five years -- the report said the
communist-led country's growth had been higher than in
many other regional countries.
But the country's economic situation would continue
worsening and this would have a major impact on social
and economic development plans over the next few
years, the office said.
``Our goods and services lack competitiveness and
therefore it's difficult to expand export markets,'' it said.
The report said expected high import levels of
consumer goods for the next year illustrated the
ineffectiveness of domestic industry and that ``this was
also a reason for a slowdown in industrial growth
rates.''
It warned that industrial growth in the coming years
would continue to fall as domestic and foreign markets
were shrinking.
Earlier this week the statistics office said industrial
production growth for the year stood at 12.1 percent,
compared with 13.2 percent growth in 1997.
The report said disbursements of foreign direct
investment in 1998 had dropped 44.2 percent
compared with the previous year to $1.22 billion.
``Investment disbursements have decreased while
investment effectiveness hasn't improved and that will
be a big obstacle for maintaining sustainable economic
growth,'' the report said.
``We are still faced with mounting overdue debt...and
its unlikely we can meet the target to reduce overdue
debts to under five percent as ordered by the
(Communist Party) Politburo,'' it added, saying that as
of July 31 overdue debt had been equal to 13.6 percent
of all outstanding credit.
The biggest concern in social affairs was mounting
urban unemployment and rural underemployment, the
report said.
It put urban unemployment nationwide at 6.85 percent
compared with 6.01 percent a year earlier. The capital
Hanoi had the worst rate with 9.09 percent of its
working population unemployed.
Reuters - December 31, 1998.
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