The Vietnamese economy probably not fulfill the Government’s target of 6.7 per cent set for the full year, given uncertainties in the global economy such as Brexit’s impact and the Fed’s rate hikes coupled with slowdown in domestic industrial production, economists said.
The economic growth could be at 6 per cent or even lower this year, Nguyen Duc Thanh, director of the Vietnam Institute for Economic and Policy Research said at yesterday’s conference to release its report on the Vietnamese macro-economy in the second quarter.
“The target of 6.7 growth is likely to be beyond reach,” Thanh said.
After disappointedly expanding at 5.52 per cent in the first half of this year, economists said that the economy must grow at 7.6 per cent in the second half to fulfill the government’s target, which Thanh said was “impossible”.
Thanh said the government should review the economic growth target, adding that insistence on high economic growth might inflame macroeconomic instabilities and the costs would be much heavier.
Thanh in the report noted that Vietnam should attach greater attention to inflation pressure which could return in the second half of this year due to recovery of commodities prices in the global market coinciding with hikes in prices of several services in the domestic market. The target of 18-20 per cent credit growth could threaten efforts of controlling inflation, he said.
Experts at the conference said that Vietnam should lower its economic growth forecast to avoid macro-economic instabilities.
While it would take time to see effects from the government’s efforts of improving the business climate and policies of promoting the private sector to the economy, if Vietnam was still determined with a high economic growth, it must use short-term stimulus measures such as increasing public investment and loosening credits, Thanh said.
“Investment-driven growth could be dangerous”, expert Vu Dinh Anh said.
In addition, the idea of mobilising idle gold held among people, estimated at around 500 tonnes, was threatening to erase anti-goldisation and anti-dollarisation efforts and fuel market instability, economic expert Luu Bich Ho said at the conference.
“What should be done is to improve business climate to encourage private enterprises to expand business and production rather than keep in safety boxes,” Ho said.
Ho also noted that budget tension was also among risks for macro-economic instability.
Vietnam Institute for Economic and Policy Research’s report suggested that the divestment of State capitals out of State-owned enterprises must be hastened to enrich State coffers.
The report also noted that Taiwanese Hung Nghiep Formosa Ha Tinh Steel Corporation causing the massive fish deaths in four central Vietnamese provinces in the past few months rung alarm bells for Vietnam to revise its economic growth model at both central and local levels.

Officials from Asean members attended the first Taiwan-Asean Strategic Investment Partnership Forum on Wednesday to discuss opportunities that Taiwanese investors may have and offer some suggestions.
Vice Economic Affairs Minister Wang Mei-hua welcomed the representatives, promising that the government would enhance economic and trade relations with Asean members in various aspects, such as investment, trade and industrial collaboration to further the “New Southbound Policy”.
The head of the New Southbound Policy Office, James Huang, suggested that Taiwan develop strategic alliances with Asean members in his speech.
He said that, as a single entity, Asean is the seventh largest economy, and that each Asean member’s annual economic growth ranged from 5-7 per cent.
During the forum’s panel discussion, investment promotion representatives from Indonesia, Thailand, the Philippines, Vietnam, Malaysia and Singapore talked about opportunities offered by their countries that Taiwanese investors may be interested in, and expressed interest in more cooperation with Taiwan.
Felicitas Agoncillo-Reyes, assistant secretary for the Philippine Board of Investments’ Investments Promotion Department, noted that the Philippines didn’t have an ageing society issue, unlike many other countries.
Her country has a considerable young labour force that is educated and fluent in English.
The new Philippines president’s policy and Taiwan’s “New Southbound Policy” can complement each other, she said.
General Director of Vietnam’s Foreign Investment Agency Do Nhat Hoang said the large, young labour force in his country meant high level of competitiveness.
He expects the relationship between Taiwan and his country to become closer because of the similar cultures and inter-marriage between the two countries.
Most officials in attendance suggested that Taiwanese investors respect each Asean country’s individuality.

The Hai Phong Industrial Zone Management Board has granted an investment licence to Flat Group from Hong Kong (China) for a solar glass factory worth US$200 million (Bt7 billion).
The factory will cover 21.8 hectares in the Dinh Vu Industrial Park, reported Dau Tu Newspaper.
It is expected to begin operations in late 2017 with a capacity of producing about 580,000 tonnes of solar glass each year.
Haiphong holds its position among the country’s top performers in foreign direct investment attraction with 31 newly-registered and capital adjusted projects valued at more than $1.74 billion in the past five months of the year.
Large economic groups from Japan, South Korea and Belgium chose Hai Phong to land their investments thanks to the northern port city’s favourable geographic location and potential.
The city is housing more than 450 valid foreign-invested projects with a total registered capital of over $12 billion. – Viet Nam News
Ayala unit now among
biggest EMS suppliers
Ayala-led Integrated Micro-Electronics Inc (IMI) is now the 6th largest global provider of electronic manufacturing services (EMS) to the automotive industry, improving its ranking by a notch from last year.
IMI’s ranking went up based on 2015 automotive EMS revenues from 7th place in 2014, according to the roster drawn up by US-based global market research New Venture Research, IMI disclosed to the Philippine Stock Exchange Wednesday.
The Laguna-based EMS company said its IMI’s ranking had gone up on the back of a 9.2 per cent increase in automotive EMS revenue shown on its audited financial statement. Revenue generated by IMI from the automotive segment amounted to $349.86 million in 2015 compared to $321 million in 2014 and $276 million in 2013.
IMI supplies customised solutions in driver assistance, driver and passenger safety, car security, and body controls, among others.
Overall, IMI is among the top 50 EMS providers in the world based on the latest list of Manufacturing Market Insider based on EMS-related revenues. – Philippine Daily Inquirer

Airbus predicts surge in
after-market spending
Airbus has published its first global services forecast (GSF) and predicted that over the next 20 years, total industry after-market service spending will reach US$3 trillion per year (Bt105.3 trillion).
Of this total, the cumulative value of maintenance, repair and overhaul (MRO) activity will exceed $1.8 trillion by 2035, Airbus predicted.
On an annual basis, Airbus predicts that the MRO spend will grow from $53 billion to over $132 billion per year, representing average year-on-year growth of 4.6 per cent.
After-market services activity is inherently linked to the growth of passenger fleets – which Airbus believes will more than double from 19,500 commercial aircraft over 100 seats at the end of 2015 to almost 40,000 by 2035.
Consequently, it said the need for pilots and technicians would commensurably increase. Today there are an estimated 200,000 active pilots who fly passenger aircraft. Airbus’ GSF predicts that this number was set to grow to some 450,000 pilots by 2035.
It said the need to replace flight crew who retire during the next 20 years would result in the need to train as many as 560,000 new pilots.
In terms of technical staff needed, Airbus GSF predicted there would be a requirement to train approximately 540,000 new technicians who would fulfil various duties across the airframes, engine, and component domains.
Airbus also said that given the accelerating demand for flights and the burgeoning airline fleets, Asia-Pacific would represent a largest portion of the market for both MRO activity and the need for new qualified pilots and technicians, while Europe and North America combined would account for approximately one third of the total MRO market spend. – The Nation