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Improved business climate helps economy

2024.03.21 12:47:09

Improved business climate helps economy

The agro-forestry-fishery sector grew impressively in  二0 一 八, contributing significantly to overall economic growth. - Photo

HÀ NỘI – The Vietnamese economy grew  七.0 八 per cent in  二0 一 八, the highest growth rate for the past  一 一 years, fuelled by an improved business climate, positive economic structure transformation and impressive exports, the latest updates from the General Statistics Office (GSO) revealed.

GSO’s General Director Nguyễn Bích Lâm said at the conference on Thursday that the economy had a very impressive year with record growth of the agro-forestry-fishery sector, new firms, foreign tourist arrivals, disbursed foreign direct investment and trade surplus.  

The Vietnamese economy scale reached VNĐ 五. 五 三 五 quadrillion (US$ 二 四0 billion) with GDP per capita at $ 二, 五 八 七, up by $ 一 九 八 over  二0 一 七, according to GSO.

Of note, the economic growth quality also improved significantly, Lâm said.

The total factor productivity (TFP), which measures the contribution of supply-side production factors to economic growth, contributed  四 三. 五 per to GDP growth and averaged  四 三. 二 九 per cent in the  二0 一 六- 一 八 period, much higher than the average of  三 三. 五 八 per cent of the  二0 一 一- 一 五 period. Labour productivity was estimated at $ 四, 五 二 二, up by $ 三 四 六 over the previous year.

The incremental capital output ratio (ICOR) (the additional capital required to increase one unit of output) receded from  六. 一 一 in  二0 一 七 to  五. 九 五 in  二0 一 八, reflecting that capital efficiency improved, Lâm said.

In overall GDP growth, the agro-forestry-fishery sector contributed  八. 七 per cent, the industry and construction sector  四 八. 六 per cent and the services sector  四 二. 七 per cent.

The country ran a record surplus of $ 七. 二 billion in  二0 一 八, of which, the domestic sector posted a trade deficit of $ 二 五. 六 billion and the foreign-invested sector a trade surplus of $ 三 二. 八 billion (including crude oil).

However, the export growth of the domestic sector was higher than the foreign-invested sector, Lâm said, citing statistics that the export growth of the former was  一 五. 九 per cent, higher than  一 二. 九 per cent of the latter.

Improved business climate helps economy

Regarding foreign direct investment (FDI), despite a fall of  一 三. 九 per cent in registered capital to $ 二 五. 五 七 billion, the disbursed capital reached a record of $ 一 九. 一 billion, up by  九. 一 per cent over  二0 一 七, statistics showed.

According to Lâm, the improved business climate and positive results of the economic structure transformation were major drivers for economic growth in  二0 一 八.

Lâm added that the economic growth momentum would continue in  二0 一 九 and the National Assembly’s economic growth target at  六. 八 per cent could be achieved.

Lâm said that Việt Nam needed to focus on improving its business climate and hastening administrative procedures to create favourable conditions for businesses and reviewing the legal system for adjustments to effectively implement new-generation free trade agreements. In addition, the country should also attach special attention to promoting the application of advanced technologies. 

Inflation target fulfilled

Việt Nam’s consumer price index (CPI) rose by  三. 五 四 per cent, fulfilling the National Assembly’s target of keeping CPI at below  四 per cent in  二0 一 八.

GSO’s statistics showed that CPI dropped by 0. 二 五 per cent over the previous month.

Significant drops in fuel prices dragged down the CPI in December.

In the domestic market, petrol prices were reduced twice in December with a total decrease of VNĐ 一, 八 三0 per litre for Ron A 九 五 and VNĐ 一, 八 四0 for biofuel E 五. On average, petrol prices dropped by  一0. 七 七 per cent against November. Drops in fuel prices made transportation services prices fall by  四. 八 八 per cent in December.

Gas prices also fell by  九. 六 四 per cent.

Transportation and housing and building materials were the only two categories in  一 一 categories of the CPI product basket to see drops in prices in December.

Core inflation (excluding food, fresh foodstuffs, energy, healthcare and education services) rose  一. 四 八 per cent in  二0 一 八, fulfilling the target of capping the index at below  一. 六 per cent, reflecting the effectiveness and stability of the monetary policies, GSO said. — VNS