Vietnam to consider more oil extraction to ensure GDP target

VietNamNet Bridge - The economy is showing good signs but to achieve the targeted GDP growth of 6.5% this year, Vietnam might have to increase oil output, said Minister of Planning and Investment Bui Quang Vinh at the monthly cabinet meeting on July 29.

Minister of Planning and Investment Bui Quang Vinh, GDP growth rate for 2015, crude oil

Minister Bui Quang Vinh.

Minister Vinh said that macroeconomic growth was flourishing and the consumer price index (CPI) was stable, increasing at a rate at the lowest level in 10 years.

The CPI rose only 0.35% in June from the previous month. Compared to December 2014, the CPI in June increased 0.55%, and 0.86% on average in the first half of 2015.

The total means of payment is estimated to increase 5.09%; the total deposits in credit institutions increased by an estimated 4.58%.

"Along with the recovery of the economy, credit growth also improved positively, when the growth rate of outstanding loans was higher than growth in deposits. This is a very good economic sign after many years," Minister Vinh said.

Notably, GDP growth reached the highest level in five years, when GDP growth in QII of 2015 was estimated at 6.44%, compared to 6.08% of the first quarter and higher than that of the same period five years ago.

Generally, in the first half of this year GDP increased by 6.28%, much higher than the same period in the previous five years.

Vinh spoke about three statistical figures: forecast, estimated, and official.

"For QI of 2015, we reported to the government of GDP growth of 6.03%, but that is the estimated number. Now we have the sufficient data and the official GDP growth is 6.08% for the first quarter. Similarly, the figure for the second quarter is a an estimate only," he said.

The total import turnover in the first half of 2015 was estimated at $81.5 billion, up 17.7% over the same period in 2014.

The trade deficit reached $3.7 billion, equivalent to 4.8% of exports. The foreign-invested sector earned an export surplus of $6.7 billion, while domestic companies suffered $9.2 billion in trade deficit (including crude oil).

Vinh said the trade deficit might be higher if the GDP growth continues to be stable or increase in the second half of the year.

In the past six months, Vietnam had 45,406 new businesses with a total registered capital of VND282.4 trillion, up 21.7% in the number and 22.3% in the registered capital over the same period of last year.

The total number of dissolved enterprises was just 5.9% of the total number of enterprises in operation.

According to the Minister of Planning and Investment, the US dollar is in on an upward trend against other currencies and it may put pressure on the Vietnam dong.

At the same time, the increase of electricity and gasoline prices has increased production costs in Vietnam, affecting the country’s economic growth.

"The decline in agricultural, forestry and fisheries exports and high trade deficit have posed many challenges to achieving the GDP growth target in 2015," Minister Vinh said.

He said that alongside measures to remove difficulties for agriculture and services, and to boost consumption and expand export markets, Vietnam would need to raise oil output to reach 6.5% GDP growth in 2015.

Chairing the cabinet meeting, Prime Minister Nguyen Tan Dung said the increase in GDP of the first half of the year (6.28%) was higher than the set target of 6.5%.

However, the government must strive to achieve GDP growth of 6.28% or higher in the second half of the year.

Regarding Vinh’s proposal, Prime Minister Nguyen Tan Dung said that in 2015 Vietnam planned to extract over 14 million tons of crude oil and the proposal must be carefully considered.


Minister of Planning and Investment Bui Quang Vinh, GDP growth rate for 2015, crude oil