Tourism stimulates growth in Vietnam
Vietnam's economy accelerated in the first three quarters of this year, government figures showed Monday, driven by faster manufacturing growth and by the impact of rising consumer wealth and increased tourist arrivals on the services industries.
Gross domestic product expanded 8.1 percent in the first nine months of 2005 compared with the same period a year earlier, according to preliminary statistics released by the General Statistics Office in Hanoi. The economy grew 7.4 percent in the first three quarters of 2004.
Vietnamese per-capita income has almost doubled since 1995, buoying retail industries in the domestic market of 82 million people.
The economy expanded 7.7 percent in 2004, the fastest pace since 1997, and the government is aiming for 8.5 percent growth this year.
"We always set a target for our sales to increase faster than the growth of the overall economy," said Nguyen Ngoc Hoa, chief executive of the Saigon Union of Trading Co-Operatives, based in Ho Chi Minh City, which operates 19 Co-Op Mart grocery stores in southern Vietnam.
"Our target customers are the middle class, and they are changing their shopping habits: buying more products, converting to supermarkets from wet markets, and looking for better hygiene, quality and service," said Hoa, who expects same-store sales, or sales excluding new outlets, to grow about 22 percent this year.
Services, which account for 38 percent of Vietnam's gross domestic product, grew by 8.2 percent, up from 7.1 percent a year earlier, the statistics office said.
Growth in the subcategory that includes hotels and restaurants surged 15.4 percent, twice the rate of a year earlier. The number of foreign visitors to Vietnam jumped 23 percent in the first nine months of the year, according to the Vietnam National Administration of Tourism, the Vietnam News daily newspaper reported Monday.
"Last week I had to take guests to other hotels for the first time in six years," said Stephen O'Grady, general manager of the 335-room Caravelle Hotel in central Ho Chi Minh City, which he said had an average occupancy rate of about 85 percent last month compared with 59 percent in September 2004. "We're struggling to find rooms for visitors to the city."
Industry and construction, which account for 41 percent of the economy, expanded by 10 percent, little changed from 10.1 percent in the same period a year earlier.
Manufacturing - the biggest category within industry and construction, making up about one-fifth of Vietnam's economy - expanded by 11 percent, up from a 9.3 percent pace a year earlier.
The country's water and power industry expanded 12 percent in the first three quarters. Electricity demand is expected to grow by 16 percent annually, which may cause power shortages in 2006 and 2007, the Vietnam Investment Review reported Monday.
By Jason Folkmanis - Bloomberg - October 03, 2005.
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