Vietnam economy growth slows for first time in 4 years

By Bennett Murray

HANOI (AA) - Despite its first slowdown in four years, Vietnam’s economy remained one of Asia’s fastest growing in 2016 according to government statistics released Wednesday.

At 6.21 percent, the estimated annual GDP growth was slightly less than 2015’s 6.68 percent and failed to reach the 6.7 percent target, according to a statement issued by the government’s general statistics office.

But the growth was nonetheless impressive, according to the office, in light of a global economy “not in [Vietnam’s] favor”, a devastating drought and the worst environmental marine disaster in the country’s history.

The year end’s GDP estimate matched the growth rate projected by the World Bank, which slashed its forecast from 6.5 to 6.2 percent in April over reports of widespread crop destruction due to a drought in southern Vietnam.

The first half of the year saw farmers lose hundreds of thousands of hectares of crops in the Mekong Delta, which is known as the “rice bowl” of the world’s third-largest rice exporter, due to the lack of rain and resulting saltwater intrusion.

The country’s multibillion dollar fishing sector also took a hit in the wake of a devastating fish die-off that killed more than 100 tons of marine life in central Vietnam.

The fish kill, which was blamed on industrial waste dumped from a steel plant in Ha Tinh province, devastated the fishing industry across four provinces while shaking consumer confidence nationwide.

Total growth from agriculture, forestry and fisheries amounted to 1.36 percent compared with 2015, the lowest rate since 2011.

Other sectors fared better, with foreign investment driven largely by manufacturing reaching a record high. Estimated foreign direct investment grew 9 percent to $15.8 billion, with South Korea the largest contributor.

Vietnam, which identifies itself as a “socialist republic” ruled by a nominally Marxist-Leninist Communist party, has seen mostly steady growth since reforms were introduced in 1986 that aimed to decentralize economic control.

But with an estimated GDP per capita of $2,215, it remains one of the poorer countries in Asia-Pacific.