Vietnam is expected to miss this year’s GDP growth target of 6-6.5% due to domestic business struggles and global economic pressures, according to country’s parliamentary economic committee.
“The economy’s main growth pillars are slowing down and some are even declining, while externally pressure is immense,” said chairman of the National Assembly’s Economic Committee Vu Hong Thanh at a meeting Monday.
He said GDP would exceed 5% this year.
The Ministry of Planning and Investment has also said that reaching the 6-6.5% growth targets this year would be unlikely due to the economy’s poor performance in the first half of the year.
Growth would need to be 10.6% in the last quarter for the whole year to hit 6%, which is roundly unexpected, the ministry added.
Minister Nguyen Chi Dung, however, said that the 5% growth rate should still be considered encouraging given the global economy’s current problems.
Lawmakers at the National Assembly meeting expressed concerns about the nation’s decreasing productivity. They pointed out that this year is set to be the third year that the country could fail to reach its growth target in this area.
Lawmaker Le Quang Huy said that any 1% growth in productivity could increase GDP growth by 0.94 percentage points, which he argued means the government needs to identify specific “solutions to improve productivity.”
Minister Dung said that productivity growth is low this year because many sectors, such as manufacturing, construction and property, faced challenges.
“Many workers have had to switch to jobs to lower productivity and needed time to be re-trained.”
Vietnamese exports in the first nine months dropped 8.2% year-on-year, which crippled Vietnam’s GDP growth target as many businesses were unable to find orders as global buyers slashed purchases due to widespread inflation.
The number of new businesses established in Vietnam over the first nine months fell 14.6% year-on-year.
Disbursement of public funds also fell below expectations at only 51.4% over the period.
The Economic Committee told the Assembly that the government should review its plan to reach GDP growth rates of 6-6.5% next year, because many feared the figure was unrealistic given the current difficult situation.