Vietnamese GDP growth in 2013 misses target

Vietnam's economy expanded 5.42 percent in 2013, below the target of 5.5 percent set by the National Assembly, according to the General Statistics Office (GSO) on Monday. GSO said in a report on the country's socio-economic development in 2013 that despite economic recovery, Vietnam still experienced a difficult year, especially the business sector. Inventories remained high, domestic consumption was weak, and banking system's bad debts at worrying level, while a large number of businesses shut down or shrank operation due to capital shortage. According to the office, Vietnam's Gross Domestic Product (GDP) increased 4.76 percent, 5 percent, 5.54 percent and 6.04 percent on year between the first quarter and the fourth quarter respectively. Though missing the target of 5.5 percent in 2013, the GDP growth is still higher than 5.25 percent in 2012. Specifically, the sector of agro-forestry-fishery expanded 2.67 percent, contributing 0.48 percentage points to the GDP, while industry and construction sector saw a growth of 5.43 percent, lower than 5.75 percent in 2012, contributing 2.09 percentage points. The service sector contributed the largest proportion to the GDP growth in 2013, with 2.85 percentage points. The sector witnessed a growth of 6.56 percent in 2013 over 5.9 percent in 2012. Of the economic structure, the agro-forestry-fishery accounted for 18.4 percent of the whole economy, industry and construction 38.3 percent, and service 43.3 percent, while the ratio in 2012 was 19.7 - 38.6 - 41.7. Inventories as of December 1, 2013 of the processing and manufacturing sector increased 10.2 percent over the same period in 2012. In 2013, a total of 60,737 Vietnamese enterprises shut down or ceased operation, up 11.9 percent year-on-year. Meanwhile, some 76, 955 new enterprises were established, up 10.1 percent. Regarding state-owned enterprises (SOEs), according to a survey in January 2013, there were a total of 3,135 SOEs across the country, down 45.6 percent, or 2,624 enterprises, from the year 2000. Answering the survey of the GSO, most of the enterprises blamed the operation failure on prolonged losses, poor management and capital shortage. A report of the Vietnamese government on Monday said the rate of non-performing loans (NPL) in Vietnam's financial institutions is expected to rise sharply by 23.73 percent in 2013. It is estimated to reach 146.5 trillion Vietnamese dong (6.94 billion U. S. dollars) in 2013. According to GSO, in 2013, Vietnam earned nearly 132.2 billion U.S. dollars from exports, an increase of 15.4 percent over 2012, while it spent more than 131.3 billion U.S. dollars for imports, up 15.4 percent year-on-year. Thus, the country recorded a trade surplus of 863 million U.S. dollars in 2013. In 2013, while domestic firms posted trade deficit of 13.1 billion U.S. dollars, the foreign investment reported nearly 14 billion U.S. dollars in surplus. Though the foreign companies recorded huge surplus and created jobs for Vietnamese employees, they brought small benefit to Vietnam as they focus on the processing and assembling with low added value.