GDP 7.46%: An important start

At the end of September, the General Statistics Office (GSO) released official figures on the growth rate of our country's gross domestic product (GDP) in the third quarter. The figure of 7.46% surprised and delighted many people.

Happy because if following the usual growth inertia of each year, the growth target of 6.7% in 2017 will certainly be achieved, because the fourth quarter only needs to grow by 7.31% (lower than the third quarter) to reach the target. Many experts are surprised, because this is a record level in many years, a sudden increase compared to the second quarter (6.28%). Because right before the day GSO announced the above data, the Asian Development Bank (ADB) even lowered the growth forecast for Vietnam in 2017 to 6.3%.

I think it is necessary for many experts to focus on the details of the GSO growth figures, especially when taking into account the key role of GDP figures when used as an anchor for a series of other socio-economic indicators.

And the recently released statistics also show positive changes in the economy after nearly 2 years of the "constructive government", with other specific figures as well as assessments from relevant parties.

Mr. Tran Van Sy - a farmer in Binh Hoa hamlet, Binh Trinh Dong commune, Long An province, next to a barren rice field. Photo: VNA

First of all, the rise of the agriculture, forestry and fishery sector, with an increase of 2.78% in 9 months, contributing 0.43 percentage points to the overall growth of the economy. This is a very commendable effort, because right after the new government took office, the Formosa marine environmental crisis and the record drought in the Mekong Delta caused this sector to have negative growth in the first 6 months of 2016, and finished with a rate of only 1.36%.

In year 2, the “oversupply crisis” of the livestock industry caused agriculture to suffer, however, the industry quickly recovered with the aquaculture industry leading the way (up nearly 6% in the first 9 months of 2017). This is a very positive result in the context that our country is continuing the process of restructuring the agricultural sector towards increasing added value and sustainable development.

Not much can be said about that process, but the Prime Minister’s active participation in the recent “Dien Hong conference” discussing the future of the Mekong Delta shows the Government’s determination to comprehensively reform agriculture. The fact that some of the industry’s key products such as fruit and chicken are allowed to be exported to major markets, including Japan and Australia, opens up a new direction for the industry to “rescue” itself.

In addition, while GDP reflects the amount of “assets” of the economy, the criteria for enterprises will tell us more about its health. Also according to the GSO's socio-economic report, in the first 9 months of this year, the whole country had 93,967 newly registered enterprises with a total registered capital of 902.7 trillion VND, an increase of 15.4% in the number of enterprises and an increase of 43.5% in registered capital compared to the same period in 2016. In addition, there were 21,100 enterprises returning to operation, an increase of 2.9% compared to the same period last year, bringing the total number of newly registered enterprises and enterprises returning to operation in the first 9 months to more than 115 thousand enterprises.

Most of the enterprises surveyed by GSO forecast that the production and business situation in the last 3 months of the year is more optimistic than in the third quarter, of which 54.2% of enterprises forecast an increase in production volume; only 9.9% of enterprises forecast a decrease. Regarding labor use, 19.3% of enterprises expect to increase the size of the workforce and 7.2% of enterprises forecast a decrease. These are very encouraging figures, showing that the spirit of encouraging production and business according to Resolutions 19 and 35 of the Government issued at the beginning of the year is gradually turning into action.

Along with that, the fact that FDI enterprises are currently the “locomotives” of exports, such as Samsung, shows that the wave of foreign investment has made positive contributions to the economy. Overall, the foreign-invested sector had a trade surplus of 17.64 billion USD in the first 9 months of the year. This indirectly proves that foreign investors are optimistic about the business environment in Vietnam, and are ready to make long-term commitments to invest in production in our country.

Those signs, along with the GDP growth index, show positive steps in the economy.

GDP growth has long been the main macroeconomic measure. However, it is not the only measure. This is also what the Prime Minister has said, not accepting to trade short-term goals for long-term macroeconomic stability, and not "forcing" to increase production regardless of the actual situation to make losses.

Perhaps the GDP growth target of 6.7% this year is within reach. But that is not the final destination, because the economy does not operate for just one year. In the long term, macroeconomic stability, opening up the business environment, and reforming the economy towards a higher level of the global value chain must remain top priorities. Achieving the growth target is an important starting point for sustainable progress in the coming years.

According to VNN