Vietnam's economic growth slowed in the first quarter, and the government indicated Wednesday that it will lower its annual growth forecast because of the global economic slowdown, and ongoing anti-inflationary measures. The Planning and Investment Ministry estimated that Vietnam’s GDP grew by 7.4 percent during the January-March 2008 quarter, compared with the same quarter the previous year, down from 9.3 percent in the fourth quarter of 2007 on a month-to-month basis. Vietnam’s first-quarter growth in 2008 was hindered by higher oil prices, slower global economic growth, and the depreciation of the U.S. dollar, the government said. Natural disasters and animal diseases also hurt.
Prime Minister Nguyen Tan Dung said in a statement that Vietnam will have to adjust its growth target of 8.5-9 percent for 2008 given "unfavorable economic conditions.” He did not elaborate. In recent years, Vietnam's growth rate has been second only to that of China, in response to economic liberalization measures that attracted foreign investment. Now, however, rising inflation rates, which reached 16.4 percent in the first quarter, threaten to undermine Vietnam’s economic growth and erode the competitiveness of its suppliers of low-cost manufactured goods such as apparel. The government estimated that its consumer price index for March would be 19.39-percent higher than a year earlier, the highest increase in more than 12 years, and the fifth double-digit increase in a row. Vietnam said imports surged 62.5 percent in the first quarter, three times faster than the growth in exports. Despite its growing popularity with global corporations, the country’s trade deficit increased to $7.36 billion during the January-March 2008 quarter, compared with $1.93 billion during the January-March 2007 quarter.
Journal of Commerce
