Vietnam’s growth engines in 2019 come from both supply and demand sides, according to Minister of Planning and Investment Nguyen Chi Dung.

Minister of Planning and Investment Nguyen Chi Dung at the discussion. Source: quochoi.vn

The growth quality has been improving, which was reflected through the result of the processes of economic restructuring and transitioning to a new growth model, Dung said at a discussion session at the National Assembly on November 31.

In the first ten months of 2019, the industry and construction sector continued to maintain high growth rates of 8.4%, in which the manufacturing and processing expanded 11% and served as the main driving force for growth, Dung stated, adding the economy has now become less reliant on the mining sector and credit growth.

According to Dung, industry, construction and services sector made up 86% of Vietnam’s GDP.

The contribution of total factor productivity (TFP), which is determined by how efficiently and intensely the inputs are utilized in production, to GDP remained over 40%, higher than previous periods of 33.58% and exceeding the target of 30 – 35%.

Vietnam’s productivity in the 2016 – 2019 increased 5.8% annually, exceeding the five-year plan of 5.5%.

In the coming time, science and technology, as well as innovation and quality human resources would continue to be major driving forces for economic growth, Dung asserted.

On the demand side, total retail sales of consumer goods and services continue posting two-digit growth and are on track to expand 11.5% for the whole year.

Thanks to stable macro-economic conditions, low inflation and higher income, aggregate demand and consumer spending have been solidified and maintain positive growth rates, Dung added.

Meanwhile, exports also achieved high growth amid global trade slowdown and growing uncertainties, with growth projected to reach 9.2% and a trade surplus of US$1 billion for 2019.

Dung noted 2020 is a decisive period for the Vietnamese government towards the realization of the five year-plan 2016 – 2020, laying the foundation for building the economic strategy for the next 5 – 10 years.

Considering all those factors, Dung said the government targets GDP growth rate of 6.8% and average consumer price index (CPI) increase below 4% in 2020. Other key economic indicators include exports with growth rate of 7% and trade deficit below 3% of exports.

Prime Minister Nguyen Xuan Phuc previoulsy said the 6.8% GDP growth in 2020 would put Vietnam among the top economic performers globally and regionally.

For 2019, Phuc said this will the second consecutive year that the government will achieve and beat 12 key social-economic goals, including the estimated GDP growth of 6.8%, helping to solidify the macro-economic base and control inflation rate.