Vietnam's GDP growth hits 2.58% in 2021

Vietnam's GDP growth hits 2.58% in 2021

While the economic growth was a decade low, it remains a positive performance given the context in which the Government was facing a challenging task of both containing the pandemic and boosting growth.

A GDP growth of 5.22% in the fourth quarter helped take the country’s economic expansion rate for the whole year to 2.58%.

Data: GSO. Chart: Hai Yen

The rate, however, was lower compared to the 2.91% recorded last year and remained a decade-low for Vietnam.

Director of the General Statistics Office (GSO) Nguyen Thi Huong gave the remarks at a year-end press conference held today [December 29].

According to Huong, the pandemic has posed severe impacts on every aspect of the economy, especially in the third quarter when many key economic zones were placed under lockdown.

“A positive growth, thus, should be seen as a major success as Vietnam strives to push for economic recovery and pandemic response at the same time,” Huong said.

The agro-forestry-fishery sector expanded by 2.9%, contributing nearly 14 percentage points to the overall growth, while the industry and construction sector grew by 4.05%, or a contribution of 63.8 percentage points, and services by 1.22%, or 22.2 percentage points to the growth.

In December, trading activities continued to be a highlight of the economy with a turnover of $66.5 billion, up 6.4% against the previous month and 19.7% year-on-year.

Garment production for exports at Garment 40 Company in Thanh Xuan District. Photo: Hai Linh

This year, Vietnam is on track to reach a trade turnover of over $668 billion, a surge of 22.6% year-on-year, with the growth of export at 19% and imports at 26.5%.

In the industry and construction sector, manufacturing and processing served as the driving force for the economy with an expansion rate of 6.37%. Electricity production and distribution posted a growth rate of 5.24%, while mining went down by 6.21% due to a 5.7% decline in oil production and 19.4% in natural gas.

The tourism industry continues to struggle with the Covid-19 impacts since late April, while the wholesale and retail were slightly down by 0.21% against the previous month, logistics shrunk by 5%, and hospitality and catering services fell by 20.81%.

On the contrary, the healthcare and social assistance activities recorded the growth of 42.75%, the highest in the services sector, finance-banking came second  (9.42%), followed by telecommunications and IT (nearly 6%).

Huong also informed the number of businesses formation and those resuming operations in 2021 was estimated at nearly 160,000, down 10.7% year-on-year. However, the figure of those who exited the market rose by 17.8% year-on-year to nearly 120,000, with the majority being small enterprises with less than five years of operation.

In 2022, the National Assembly set the GDP growth target of 6-6.5%, which remains key for Vietnam to ensure the realization of its five-year socio-economic development targets and raise the GDP per capita to around $3,900.

Hanoi Times