Tuesday, January 01, 2008

Vietnam economy grows nearly 8.5 pct in 2007

HANOI (AFP) — Vietnam's economy grew by nearly 8.5 percent in 2007, the fastest rate in 11 years, after the country joined the World Trade Organisation, the communist government said Monday.

The gross domestic product (GDP) growth rate of 8.48 percent, compared to 8.2 percent in 2006, was one of the highest in Asia but was topped by neighbouring China, said the Government Statistics Office (GSO).

Industry and construction made up 42 percent of the developing country's economy, followed by the services sector with 38 percent, and agriculture, forestry and fisheries with 20 percent, said the GSO.

Vietnam, which launched market reforms two decades ago and joined the WTO in January, attracted a record 20.3 billion dollars in investment pledges after promising to further open its doors to foreign business under WTO rules.

South Korea topped the list of foreign investors with 4.4 billion dollars pledged, followed by the Virgin Islands, Singapore and Taiwan. Total foreign investment in 2006 reached 12 billion dollars.

Releasing its final economic estimates for the year, the GSO also said Vietnam was battling an annual inflation rate of 8.3 percent, driven in part by a 15 percent jump in food prices and higher fuel costs.

The trade deficit reached a record 12.4 billion dollars as a 21.5 percent rise in export revenues to 48.4 billion dollars was outpaced by a 35.5 percent jump in the cost of imports to 60.8 billion dollars.

The surge in import revenues was in part due to a sharp increase in machinery and equipment imports, up 56.5 percent to 10.4 billion dollars, and a 25.7 percent rise in the cost of refined oil products to 7.5 billion dollars.

On the export side, Vietnam -- which has fast offshore oil and gas reserves in the South China Sea but no operating refineries yet -- earned 8.5 billion dollars from crude oil sales, up 2.6 percent on 2006.

Export revenues from garments and textiles made in the low-wage country rose 33 percent to 7.8 billion dollars. Footwear exports rose 10 percent to four billion dollars and fisheries exports 13 percent to 3.8 billion dollars.

The United States was the top export market with 10 billion dollars in revenues, followed by the European Union with 8.7 billion dollars, and the 10-member Association of Southeast Asian Nations with 8 billion dollars.

Exports to Japan reached 5.5 billion dollars followed by China with 3.2 billion dollars, said the GSO.

In the tourism sector, Vietnam received 4.2 million foreign visitors, up 18 percent on 2006. Chinese topped the list, with about 575,000 arrivals or 13.6 percent of the total, followed by South Korea, Japan and the United States.

The Vietnamese government -- which said economic growth in 2007 was hampered by a series of typhoons, floods and disease outbreaks -- is targeting economic growth of nine percent next year.