Holiday rush will raise Q4 GDP growth to 6%
Holiday rush will raise Q4 GDP growth to 6%
The country's gross domestic product (GDP) growth would hit 6 per cent in the fourth quarter thanks to rising demand in the last months of the year and a stronger macro-economy.
The rise was forecast by the National Financial Supervisory Commission, which added that it would bring the annual GDP growth to 5.3 per cent, still lower than the Government's target of 5.5 per cent.
The commission said rising demand in the lead up to big holidays such as the Lunar New Year would help lift GDP growth in Q4 to 6 per cent.
Improvements seen in the country's macro-economy last month were also expected to boost growth, the commission said.
It further said that the purchasing managers' index (PMI) hit a high of 51.5 in October thanks to rising export orders and that the industrial production index in Q3 also rose to 6 per cent, up from 5.2 per cent in Q2 and 4.5 per cent in Q1.
Exports in October also surged 15.2 per cent while imports were lower than in previous years, although buying of raw materials and equipment for production rose significantly.
The rise of material imports showed that domestic production was stronger, the commission said.
But the commission said it was hard to maintain the high GDP rise in the long term, reasoning that it would not be feasible under the current economic growth model.
The Government should speed up economic reforms within the next 2-3 years to enhance productivity and raise economic growth in the long term, the commission recommended.
It also anticipated that the country's average monthly inflation would jump by 0.6-0.8 per cent from now to the year's end, providing there were no sudden and large changes in prices of commodities controlled by the Government.
It said that commodity prices would post the highest price increases in the last quarter of this year, driven by hikes on food and foodstuffs, higher seasonal purchasing demand in the run up to the New Year and Lunar New Year, plus the possibility of petroleum and gas price adjustment.
The commission forecast this year's inflation would be controlled at around 7 per cent as targeted, provided there was good management and regulations on prices of goods and services.
Inflation had risen 5.14 per cent this year to October.
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