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Unprecedented adjustment of GDP growth rate for 2008   2009-03-27 - VietNamNet/VNE

The GDP growth rate in 2008 was just 6.18% instead of 6.23% as previously announced, due to greater decreases than were thought in many production, trade and investment fields. The decreases will continue this year with the GDP growth rate expected at 4.8-5.6%, according to the General Statistics Office (GSO).


GSO this morning announced the socio-economic report for the first quarter of 2009 and gave an additional report about the economy's performance in 2008.


Agriculture, forestry and fisheries saw strong growth, but this could not offset the decreases of two other sectors, construction-industry and services. Therefore, the total GDP in 2008 was VND489,800bil only, or VND1,400bil lower than the estimated figure GDP announced late last year.


Moreover, real export turnover in 2008 was also lower by $221mil than the estimates, reaching $62.7bil only. On the contrary, import turnover turned out to be higher by $298mil than the estimated figure, reaching $80.7bil. This spells that the trade deficit should be $18bil instead of $17.5bil.


This is the first time a big GDP adjustment has been announced.


Bui Ba Cuong, Head of the National Accounts Department under GSO, said that in general, the office announces the estimated figures for the whole year at the end of the year, and then announces the official figures of the year by the end of the subsequent year after it has enough data. However, the situation is different this year. The Ministry of Planning and Investment has asked for the exact figures so that it can adjust the economic goals for this year, in the context of the unpredictable economic conditions.


“We will announce the final figures at the end of the year after the survey in early March and early October. There will be some adjustment,” Cuong said.


In previous years, the real implemented figures were just +/-0.01-0.02% different from the estimates.


When the national economy stabilises, statistics work is carried out under a set plan. Three surveys are carried out to review the socio-economic conditions of the previous years. These include a survey on enterprises carried out in early March, population and job census in early April, and household businesses in early October. When GSO gets all the figures it needs, it will give final figures about the socio-economic performance of previous years.


However, Cuong believes that in the current circumstances, it is necessary to carry out additional surveys, or statistics agencies will not have timely information to serve the forecasting.


Also in this morning, GSO gave the forecast that the GDP growth rate in the first quarter of 2009 would increase by 3.1% over the same period of last year, much lower than the growth rates of the same periods of previos years.


It is estimated that agricultural production decreased by 0.1%. Industrial production value in the first three months of the year still increased by 2.1%, but the result came from the efforts of the non-state and foreign-invested sectors rather than the state-owned economic sector. The industrial production value of the state-owned sector decreased by 3.2%.


The output of many industrial products decreased dramatically from the previous year, mainly because of slow consumption, and narrowed markets, both of which have led to big stocks.


By the end of February, the inventory volume of the processing industry had reportedly icreased by 67% over the same period of the last year. The steel stocks increased by 2.6 times, ready-made clothes 76%. A lot of enterprises in key cities and provinces, including Binh Duong, Dong Nai, Hai Phong and Vinh Phuc, have had to cut their regular workforces by 15%.


The total commodity and service retail turnover in Q1 2009 is estimated to reach VND270tril, up by 21.9% over the same period of 2008. However, if not counting price increases, the total commodity and service retail turnover increased by 6.5% only, lower than the 11% increase of the same period of last year.


The implemented investment capital in Q1 2009 reportedly reached VND116.3tril, up by 9% over the same period of last year, of which VND57.4tril was for the state-owned sector, up by 20%, while VND39.6tril for non-state sector, up by 30%. As for the foreign-invested sector, the implemented capital was just VND19.3tril, down by 32%.


GSO believes that with the current difficulties, the GDP in 2009 will grow by 4.8-5.6%, lower than the target set by the National Assembly. Export turnover is expected to reach $56-58bil, and import turnover $63-65bil.

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