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Overview of the socio-economic development of Vietnam in 2017
2/5/2018 15:38' Send Print
Gross Domestic Product (GDP) in 2017 increases to 6.81%, following a positive trend. Image: tuoitre.vn

Outstanding achievements

1. In economy

An overall assessment of the achievements of 2017 stated that all socio-economic development targets set by the National Assembly were fulfilled and overfulfilled, much higher than six years before. Notably, the national economy obtained VND5 million billion, and Vietnam rose to the group of 50 economies of the world. The year 2017 also boasted a number of records, such as total foreign direct investment (FDI), export turnover, the number of enterprises established, the number of tourists, and restructuring of public debts. Progress was also made in social security, building of new rural areas, hunger alleviation and poverty reduction, health care, education among others.

Overall growth

Gross domestic product (GDP) in 2017 rose to 6.81%, following a positive trend with the following quarter higher than the previous one: the first quarter increased to 5.15%; second quarter to 6.28%; the third quarter to 7.46%; and the fourth quarter to 7.65%. Of the 6.81%, the agriculture, forestry and fishery sector saw a significant recovery with a rise of 2.9% (higher than 1.36% of 2016), contributing 0.44 percentage point to the overall growth; the industrial and construction sector increased to 8%, contributing 2.77 percentage points; the service sector increased to 7.44%, contributing 2.87 percentage points. The growth rate of the year exceeded the target of 6.7% and higher than those from 2011 to 2016. These confirm the timeliness and effectiveness of the solutions issued by the Government, and the affirmative direction of all levels, sectors and localities joint efforts.

The scale of the economy in 2017 at current prices reached VND5,007.9 trillion; per capita GDP gained VND 53.5 million, equivalent to US$2,385, an increase of $170 compared to 2016. The structure of the economy had positive changes: the agricultural, forestry and fishery sector accounted for 15.34%; the industrial and construction sector 33.34%; the service sector 41.32%; Product tax after deducting subsidy stood at 10%.

Due to high economic growth, state budget revenue and expenditure were positively transformed; the finance situation was healthy; the banking system developed with relatively high growth. In 2017, budget revenue exceeded 5%. Central budget revenue ensured balance, and local budget revenue exceeded 12.9%. This was a positive achievement in the implementation of the state budget in 2017.

Total State budget expenditures as of December 12th, 2017 was VND1,219.5 trillion, equal to 87.7% of the yearly estimates, of which current expenditure was VND862.6 trillion, equal to 96.2%; interest payment: VND 91 trillion, equal to 92%; for development investment alone, the spending was VND259.5 trillion, accounting for 72.6% of the yearly estimates (of which capital construction was VND254.5 trillion or 72.3%). Repayment of principles in the same period was estimated at VND147.6 trillion, equal to 90.1% of the yearly estimates. State budget deficit in 2017 decreased by VND 4,000 billion against estimates, which is a positive sign.

The size of the capital market was estimated at 103.42% of GDP. The stock market made great progress, playing an important role in supplying medium and long-term capital for the economy, boosting the efficiency of corporate governance. The size of the capital market at the end of 2017 was estimated at 103.42% of GDP, compared to 80% in 2016, the highest ever since the market was opened.

Healthy banking and insurance development

The total M2 of the banking system increased by 14.19% compared to 16.47% of the same period of 2016; capital mobilization by credit institutions increased to 14.5% compared to 16.88% of the same period of 2016; credit growth of the economy reached 16.96%. The mobilized interest rate was stable and loan interest rates for production and business were 6.8% - 9% annually for short term; and 9.3%-11% annually for medium and long term. In general, the credit structure focused on priority areas of production and business, and key target areas set out by the Government to effectively support economic growth.

The insurance market grew positively. Total insurance premiums reached VND105.6 trillion, up 21.2% over the previous year. Insurance companies reinvested about VND247.8 trillion, up 26.74% to the economy. The total amount of insurance payment in 2017 reached VND29.4 trillion, up 14.9% over 2016.

Manufacturing and service sectors recovered quickly and developed fairly well

Among agriculture, forestry and fishery, the fishery sector recorded the highest growth rate of 5.54%, contributing 0.17 percentage points to the overall growth. Agriculture increased 2.07% as compared to 0.66% in 2016, contributing 0.24 percentage points, showing signs of recovery after severe effects of 2016 natural disasters. Product structure was reformed within the sector to focus on high economic value and efficiency such as aquaculture, catfish and shrimp rearing and vegetables of high quality to export to fastidious markets such as the United States, Australia, European Union (EU), among others.

The industry sector achieved an increase of 7.85%, higher than 7.06% of 2016, contributing 2.23 percentage points to the overall growth. The highlight of this sector was the manufacturing industry with an increase of 14.4%, the highest increase in seven years, contributing 2.33 percentage points to the overall growth.

In the service sector, wholesale and retail trade grew 8.36% over the previous year, making highest contribution of 0.79 percentage points to the overall growth. Accommodation and catering services saw a relatively high growth rate of 8.98% compared to 6.7% of 2016, contributing 0.33 percentage points.

Tourism’s high growth rate

In 2017, Vietnam welcomed 12.9 million international tourists, an increase of nearly 30% compared to 2016 and more than 73 million domestic visitors. For the first time, Vietnam entered the list of countries with fast tourism growth rate, standing at the sixth position among the 10 fastest growing tourist destinations in the world and the top in Asia as identified by the World Tourism Organization in terms of speed. Total revenue from tourism in 2017 bagged more than VND510,000 billion, making an important contribution to the country's economic growth.

Investment capital for social development in 2017 was quite high, especially private capital and FDI. Total social investment implemented in 2017 at current prices is VND1,667.4 trillion, up 12.1% and equal to 33.3% of GDP, fulfilling the plan; Non-state sector achieved VND676.3 trillion, accounting for 40.5%, an increase of 16.8%, a remarkable new success.

Foreign direct investment

From the beginning of the year to 20 December 2017, 2,591 new licenses were issued with a registered capital of $21.3 billion, up 3.5% in terms of project quantity and 42.3% in capital as compared with the same period of 2016. Besides, another 1,188 projects which were licensed in previous years registered to adjust their investment capital with additional amount of $8.4 billion, up 49.2% over the same period of 2016, raising the total new registered capital and additional capital in 2017 to $29.7 billion, up 44.2% compared to 2016. Foreign direct investment in 2017 bagged $17.5 billion, up 10.8% over 2016. In 2017, foreign investors for 5,002 times made capital contributions and share procurement with a total capital of $6.2 billion, up by 45.1% compared to 2016.

Import and export of goods and services reached a record level, overfulfilling the plan

In 2017, export turnover gained $213.8 billion, an increase of 21.1% compared to 2016 (it was planned to increase by 10%), this was the highest growth in many years, in which domestic economic sector’s share accounted for $58.53 billion, an increase of 16.2%; and foreign invested sector (including crude oil) $155.24 billion, an increase of 23%. Excluding the price factor, export turnover in 2017 went up to 17.6%.

Export turnover of some key items grew relatively high compared to 2016: Telephone and spareparts obtained $45.1 billion, up by 31.4%; textiles and garments $25.9 billion, up by 8.8%; electronics, computers and spareparts $25.9 billion, up by 36.5%; footwear $14.6 billion, up by 12.6%; machinery, equipment, spare parts $12.8 billion, up by 26.4%; aquatic products $8.4 billion, up by 18.5%; timber and wood products $7.6 billion, up by 9.2%.

Exports of agricultural, forestry and fishery products in 2017 boasted $36.37 billion as against $32.1 billion of 2016, up by 13% over the same period of 2016. Specifically, the export value of agricultural products gained $18.96 billion, up by 15.7%; aquatic products $8.32 billion, up by 18%; and forest products $7.97 billion, up by 9.2%. In general, exports of agricultural, forestry and fishery products grew in both quantity and value, especially the value of fruit and vegetable exports was $3.45 billion, up by 40.5% as compared to the same period of 2016. This was of new and important significance to the production and export of agricultural products in general and vegetables and fruits in particular compared to 2016.

Import turnover obtained $211.1 billion, up by 20.8% over 2016, of which the domestic economic sector gained $84.7 billion, up by 17%; foreign invested capital $126.4 billion, up by 23.4%. Excluding the price factor, import turnover in 2017 increased by 17.7% compared to 2016. Import turnover of some commodities for domestic production increased over 2016. Regarding the structure of imported goods in 2017, import of production material stood at $192.9 billion, up by
21.1%, accounting for 91.4% of the total import turnover.

In 2017, Vietnam's export and import turnover reached $400 billion, a four-fold increase from $100 billion in 2007 after Vietnam officially became a member of the World Trade Organization (WTO). Along with that, the trade balance also changed remarkably. Trade surplus was $1.78 billion in 2016 and $2.7 billion in 2017.

The average consumer price index (CPI) in 2017 rose by 3.53% compared to 2016, below the target set by the National Assembly. CPI in December 2017 was 2.6% compared with December 2016, average monthly increase of 0.21%. Domestic gold price fluctuated following that of the world, an average increase of 3.71% in 2017 compared with 2016. The price index of the US dollar in December 2017 decreased by 0.05% compared to the same period in 2016, an average annual increase of 1.4% in 2017 compared to 2016.

2. On social issues

The population growth rate reduced sharply; positive progress was made in people's healthcare; employments rose up and unemployment decreased.

The country's population in 2017 was estimated at 93.7 million, an increase of 987,300 people, equivalent to 1.07% growth compared to 2016, including urban population of 32.9 million, accounting for 35%, and rural population of 60.8 million, accounting for 64.9%. Many positive changes were made in medical activities and people’s healthcare.

In 2017, the total fertility rate was estimated at 2.04 children per woman and below the replacement rate. The sex ratio of newborns was 112.4 boys against 100 girls; crude birth rate was 14.71‰; crude death rate was 6.84‰. Low mortality rate showed that the maternal and child healthcare programs in particular, the public health protection and the improvement of people’s living standards in general were effective. The average life expectancy through out the country in 2017 was 73.5 years, of which 70.9 years for men and 76.2 years for women.

The number of laborers aged 15 and over working in the economic sectors in 2017 was estimated at 53.7 million, an increase of 416,100 over 2016. The percentage of trained laborers in the working-age group was 21.5% higher than 20.6% of 2016. The unemployment rate for people of working-age group in 2017 was 2.24% (2.3% in 2016 and 2.33% in 2015).

On people’s life and social security

The living standard of the population in 2017 was generally stable and improved, the number of poor households decreased. In 2017, there remained 181,400 households, a decrease of 31.7% or 746.1 thousand people suffering from food shortage, a decrease of 32.1%. This situation which often takes place in the first and last months of the year tends to decrease. To overcome this situation, at the beginning of the year, all levels, branches and organizations from the central to local levels provided 22.8 thousand tons of food and over VND1.1 billion to those households which lacked food. According to the multidimensional poverty line applied during 2016-2020, the poverty rate in 2017 was estimated at 8%.

Due attention was paid to those families and people who have made great services to the country by the Party, the State and society. In 2017, the State spent VND5,832 billion, including VND3,370 billion in gifts and support to policy entitled beneficiaries; VND1,759 billion to support poor households and VND703 billion for hunger and social relief. In addition, nearly 17 million cards of health insurance and free medical check-up and treatment were presented to policy entitled beneficiaries nationwide.

On education and training

All 63 provinces and centrally-run cities achieved universalization of preschool education for 5-year-old children and universalization of primary education at the right age at level 1 as stipulated in Circular 36 of the Ministry of Education and Training, of which 12 were recognized for universalization of primary education at level 2.

As far as vocational training is concerned, by the end of 2017 2,090,000 people were trained, of which enrollment to colleges and vocational secondary schools was 540,000; enrollment to elementary level and training under 3 months was 1,550,000. In addition, around 600,000 rural workers and 19,000 people with disabilities received vocational training in 2017.

On culture, physical and sports activities

In 2017, many outstanding activities took place, such as the 6th Quang Nam Heritage Festival; 2017 Telefilm Exhibition in Ho Chi Minh City; the second National Don ca tai tu Song Festival in Binh Duong; and Da Nang International Fireworks Festival. Folk genre Bai Choi was listed as an Intangible Cultural Heritage of Humanity; Phu Tho Xoan Singing was removed from the List of Intangible Cultural Heritage in Need of Urgent Safeguarding and inscribed on the Representative List of Intangible Heritage of Humanity of UNESCO.

As of November 30, 2017, Vietnam won 1,045 medals in international sports tournaments, including 425 gold, 301 silver and 319 bronze medals. At the 29th Southeast Asian Games (SEAGAMES), Vietnam Sports Team bagged 168 medals of all kinds (58 gold, 50 silver and 60 bronze medals), standing in the third position among 11 participating countries.

On traffic safety

The number of traffic accidents dropped by 7% in 2017; the death toll decreased by 4.7%; the number of injuries was lowered by 7% and the number of minor injuries decreased by 12.6%. As a result, traffic safety saw positive changes in all three categories: number of accidents, deaths and injuries.

Overcoming the consequences of climate change and natural disasters

For the whole of 2017, natural disasters claimed 389 lives and missings and 668 people injured. Total losses caused by natural disasters in 2017 were estimated at VND60 trillion, 1.5 times higher than in 2016.

To proactively respond to natural disasters, central and local leaders deployed in time and effectively measures and implemented the "4 on-the-spot" motto. The government supported more than 14.6 thousand tons of rice and people through out the country donated thousands of billions of VND for localities to overcome the consequences of natural disasters. As a result, by the end of the year, production and life of people in the disaster areas were basically stabilized and gradually developed.

Environmental protection and fire and explosion prevention

In 2017, the Government directed branches, localities, enterprises and the whole society to undertake drastic measures to protect the ecological environment for socio-economic development and achieved positive and concrete results.

Business investment environment

For the whole 2017, 126,859 new businesses registered with a total prescribed capital of VND1,295.9 trillion, an increase of 15.2% in quantity and 45.4% in registered capital compared to 2016; the average registered capital of newly established enterprises was VND10.2 billion, up by 26.2%. Including VND1,869.3 trillion of more than 35.2 thousand businesses which raised up their capital, the total registered capital contribution to the economy in 2017 was VND3,165.2 trillion. In addition, 26,448 businesses resumed operation, bringing the total number of businesses in 2017 to 153,300.

Comprehensive results in the economic and social fields have contributed to strengthening confidence and creating an enthusiastic atmosphere in the whole society, highly appreciated by the international community. According to the United Nations, Vietnam’s Sustainable Development Index in 2017 jumped up 20 levels, ranking 68 out 157 countries and territories.

Limitations and constraints

Besides achievements, there remain many limitations and constraints as follows:

In economy:

Though quality of growth was improved but slowly; labor productivity was not high. Some branches and fields recorded low growth. Export of some commodities dropped compared to the previous year: coffee gained $3.2 billion, down by 3.7% (quantity down by 20.1%); pepper obtained $1.1 billion, down 21.7% (though quantity increased by 20.9%) because the average export prices of these commodities dropped by 21.1%.

The allocation and disbursement of public investment was slow, falling short of plan. Public debts were still high; it was difficult to settle bad debts; equitization of state-owned enterprises and withdrawal of state investment from some enterprises and businesses fell short of expectation. Many investment projects of SOEs were slow with low efficiency, suffering losses. Although the number of newly-established enterprises was quite high, they are mainly small and medium enterprises having low competitiveness and limited links with FDI. Restructuring of agricultural, industrial and service sectors in some regions and localities was also slow and confused and not connected with the market. Management of urban development was still limited. Smuggling, trade frauds, production of fake and poor quality fertilizers, cheating in businesses in multi-level forms and black credit still occurred. Economic restructuring was slow; competitiveness was limited. Public debts went up, people’s income and living standards were still low. Per capita GDP was VND53.5 million, equivalent to $2,385, up by $170 compared to 2016 but still lower than demand and compared with other countries in the region. Environmental pollution, safety, food security developed complicatedly.

On social issues:

In 2017, there were 175,800 cases of dengue fever (38 died); nearly 102,700 cases of foot and mouth disease; 630 cases of typhoid; 720 cases of viral encephalitis (26 died); 111 cases of food poisoning, 3,374 people poisoned, of which 22 died.

The quality of higher education and vocational training was slowly improved, not really linked to social needs. The development of science and technology market still met with difficulties; the number of participating enterprises was low with small scale. Social insurance, and health insurance evasion and debts were not effectively remedied. The living conditions of ethnic minorities, and people in remote, mountainous and natural calamity-prone areas remained difficult. Child and woman abuse, domestic violence, child accidents and drowning still occurred. There were also constraints in ensuring security and internet safety as well as mistakes in the media.

Illegal logging and sand mining were rampant in many places; Waste and losses were also found in management and exploitation of minerals and water resources. Security and order in some areas developed complicatedly. In 2017, there were also several criminal cases, drug offenses, oppositions of law-enforcement personnel, traffic accidents, serious fire and explosion.

Vietnam's economy in 2017 achieved a miracle in an impressive year with breakthroughs. GDP growth rate reached 6.81%, exceeding the plan of 6.7%. Vietnam attracted $36 billion as FDI with FDI disbursement of 18 billion USD; achieved a record high total import and export turnover of $400 billion; attracted 13 million foreign tourists; and set a record of $52 billion on foreign reserves. These bright spots contributed to draw the picture of Vietnam economy in 2017 with many records and achievements.

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This article was published in the Communist Review No 904 (February 2018)

PGS, TS. Nguyen Sinh CucGeneral Statistics Office