Economic review

According to initial estimates, the gross domestic product in the first quarter of 2005 increased by 7.2% (as compared to 7% of the same periods in 2003 and 2004), with a 4.1% growth rate in agriculture, forestry and aquaculture production value; an 8.5% growth rate in industry and construction and a 7% growth rate in services.

The 4.1% increase in agriculture, forestry and aquaculture production value in the first quarter is remarkable as compared to last year’s 1.3% increase, which resulted from a robust increase in agriculture production value of 3.8% and 6.1% in aquaculture production value.

Industry and construction sectors combined growth rate in the first quarter is lower than those of 2004 and 2003 mainly because the industry growth rate is lower than that of 2004 due to lower crude oil and power output while the processing industry production value is just the same as that of 2004 first quarter.

The service sector recorded a 7% growth rate, higher than those of the same periods in 2004 and 2003 thanks to steady high growth rates in major service industries, namely trade 7.3%; transports, post and tourism 7.4%; finance, banking and insurance 7.7%, and a notable 11.1% growth rate in hotel and restaurant business sector.

2. Agriculture, forestry and aquaculture production

Agriculture, forestry and aquaculture production value in the first quarter is estimated at 38.7 trillion VND, up by 5% as compared to the 2004 first quarter (valued by the 1994 comparative prices), of which agriculture production value reached 29.7 trillion VND, up by 4.9%; forestry 1.4 trillion VND, up by 0.6% and aquaculture 7.6 trillion VND, or an increase of 6.5%.

As of 15^th March 2005, 2887 thousand hectares nationwide have been put to cultivation for the summer-spring crop, equivalent to 98.7% of the volume in 2004 first quarter, 1109,4 thousand ha of these are in the northern provinces, or 99,6% of the previous year first quarter's volume; 177,6 thousand ha in the southern provinces, or 98,1%, while provinces in the Cuu Long (Mekong) Delta have harvested rice on 1471,6 thousand ha, or 100,1% as compared to 2004 first quarter's volume in localities.

Other crops have also been grown on national scale, namely maize on 364,5 thousand ha, or a 106,2% increase as compared to 2004 same period's volume, peanut on 159,8 thousand ha, or a 100,2% increase; soya bean 73,1 thousand ha, 112,3%; tobacco 13,5 thousand ha, or a 109,8% increase; in contrary, the areas of sweet potato, casavas and vegetables have been shrinking.

Recovered and growing flocks of poultry, in comparision with 2004 same period's, contributed to the increase in poultry production and husbandry. The total amount of livestock, especially pigs, tends to increase dramatically because of the increasing number of farmers turning to cattle-breeding to meet the market demand for subtitutes of poultry. According to preliminary estimate, the herd of pigs increased by 6-7% as compared to the same period last year.

Continued droughts affected forestation and forest protection. The forestation areas in the first quarter reached 54,5 thousand ha, or 99,6% of the previous year first quarter's; 48,1 million more trees have been planted in scattered areas, an increase by 101,5% as compared to the last year first quarter; the amount of timber reached 640,2 thousand m3 or an 100,5% increase.

The production output in this sector is estimated to reach 779 thousand tons in 2005 first quarter, increasing 5,6% as compared to 2004's same period, out of which 252 thousand tons comes from aquatic cultivation , up by 11,5%; 527 thousand tons from aquatic exploitation, up by 3% as compared to the last year's same period. The volume of cultivated aquatic products increased considerably in comparision with last year's first quarter because the aquatic cultivation for export areas have entered harvest season in addition to high production value of sugpo prawn from its extensive farming areas. Thanks to more favourable climate conditions in March, the volume of aquatic product exploitation in the first quarter, increased sharply and the maritime exploitation output was 479,6 thousand tons, up by 3,8%.

The industrial production value in March 2005 was estimated at 36,27 trillion VND, up by 13,4% as compared to March 2004, but lower than the growth rate of last year's same period mainly due to dropping in crude oil output and slow growth of State-owned enterprises (around 5,2%) with locally-governed State-owned enterprises' growth rate of only 1,5% following equitisation of some large-scale SOEs.

Industrial production output in the first quarter was estimated at 101,26 trillion VND, up by 14,4% as compared to last year's same period in which State-owned economic sector made up for 33,5 trillion VND, up by 7,9%, non-State economic sector 30,3 trillion VND, up by 25,5 % and foreign - invested sector up by 12,5% (petrolium and gas down by 8,3% while other industries up by 19,7%).

The first quarter growth rate of the mining industry was 4,3% as compared to last year's same period. The increasing oil price in the world market has enabled the limited oil volume exploitation for sustainable development (crude oil exploitation down by 10,1% and natural gas down by 0,5%).

The production value of processing industry in the first quarter is estimated at 85,6 trillion VND, up by 15,9% as compared to 2004 first quarter. Some major items in the processing industry significant to the development of the national economy still maintained high growth rates as compared to last year's same period. They include: exploitation of clean coal, up by 18,2%, processed seafood 20,7%; assembled motorbike 23,4%, assembled automobile 18,5%... Major industrial products recording an approximately 10% value increase include: ready made garments, up by 10%; fertilizers 7,8%; cement 5,6%; electrical engines 7,2%; television assembly 5,1%…Meanwhile, declining outputs are seen in some industrial products as compared to last year's first period due to dependency in imported input materials and limited market access. These include: silk cloth down by 0,1%, knitwear down by 10,9%; tool machinery 18,6%; diesel engines 16,3%; particularly bicycles down by 23% due to difficulty in finding export markets.

The State-budget funded investment in construction in the first quarter is estimated at 10857,3 billion VND, or 20,9% of the planned target for 2005. The investment capital under central government control is 4775,5 billion VND, or 24% of the year target, of which under the Ministry of Transportation is 1681,5 billion VND, or 29,2% of the year plan, under the Ministry of Agriculture and Rural Development 425,2 billion VND, or 23,7%; Ministry of Health 123 billion VND, or 14,5%; Ministry of Education 106,2 billion VND, or 17,7%; Ministry of Culture and Information 47,3 billion VND, or 13%. The investment capital under local authority management is 6083,8 billion VND, or 19% of the year plan, in which in Ha Noi is 15,6%, Ho Chi Minh City 17%, Hai Phong 21,1%, Da Nang 18,7% and Lam Dong 20,6%...

For foreign direct investment in the first quarter of 2005, there are 109 licensed projects with the total registered capital of 1,31 billion USD, down by 9,2% in terms of the number of projects as compared to last year's same period, but 3,1 time higher in terms of capital. The average capital amount of licensed projects in 2005 first quarter reached 12 million USD, higher than the average of 3,5 million USD of last year first quarter.

There have been 82 licensed projects with registered capital of 416 million USD in the south, accounting for 75,2% and 31,8% in terms of the number of projects and the amount of registered capital respectively. In the north the corresponding figures are 24.8% and 68.2%. Major investors in terms of registered capital are Luxembourg, Hong Kong (China), Taiwan, ROK, Japan, Virgin Islands (UK) and China.

Consumer prices in 2005 first quarter as compared to previous month and December 2004 did not experience any unusual fluctuations and followed the trends of 2004 and previous years. The price index in March 2005 increased by 0,1% as compared to February and 3,7% as compared to December 2004.

Increased consumer price index in March was mainly due to a 0,2% increase in price index of staple food and foodstuff (with a 1% increase in staple food and little increase foodstuff as compared to last month's.)

As compared to December 2004, the price index in March 2005 increased by 3,7% with concurrent increases in all groups of commodities, especially that of staple food and foodstuff up by 6,1% (staple food up by 4,9% and foodstuff 6,3%). However, the price index in March 2005 increased by 8,4% as compared to that of March 2004 and the average price for 12 months as of March 2005 rose considerably, around 9%. This requires great attention in fulfilling inflation control target.

Export turnover in the first quarter of 2005 is estimated at 6,72 billion USD, up by 16,2% as compared to 2004 first quarter. This quarter’s export turnover excluding oil export value is estimated at 5,14 billion USD, up by 12,5% in which domestic economic sector accounted for 2,95 billion USD, up by 9% and foreign invested sector up by 17,6%. Oil export value made up 39,1% of the total export turnover, domestic economic sector 25,8% and foreign invested economic sector (excluding oil) 35,1%.

Oil export value in the first quarter is estimated at 1579 million USSD, accounting for 23,5% of the total export turnover and despite their different export value growth rates and price competitiveness, other major export items with the value of over 100 million USD have seen increases in value as compared to 2004 first quarter and contributed greatly to the increased export value in this first quarter:

However, export value of some items such as textile and garment, footwear, rice and rubber is not as high as that of 2004 first quarter. Additionally, the exported volume of some agricultural products namely rice, coffee and pepper have not reached the volume of 2004 first quarter due to limited supply.

Import turnover of this first quarter is estimated at 7,85 billion USSD, up by 18,5% as compared to 2004 same period, in which import value of the domestic economic sector is over 5,15 billion USD, up by 19,5%; foreign invested economic sector 16,8%. 20 out of 23 major import items recorded increases in their import value as compared to 2004 same period such as: petroleum up by 8,8%; steel up by 21,8%; plastic by 27,8%; chemical 21,1%; insecticides 25,1%; cloth 1,4%; cotton 42,3%; wood and wooden components 50,6%; equipment and machinery 27,5%; electrics, computer and spare parts 39,5%; motorbikes over 580%; automobile 51%...3 main items of lower import value than that of 2004 same period include fertilizers, down by 48,5% (due to increasing domestic supply); textile and garment materials and components down by 8,4%;woven fibre down by 11,6%.

Trade deficit in 2005 first quarter is 1,14 billion USD, or 16,8% of the total export turnover, higher than the 13,7% of 2004 first quarter.

Tourist activities in this first quarter increased dramatically as compared to 2004 first quarter. The estimated number of foreign visitors to Vietnam in this first quarter is 877,5 thousand people, up by 22,8% as compared to 2004 same period (clearly higher than the 4% growth rate of 2004 first quarter), in which travellers account for 59,8% of the total number of visitors, up by 37,2%; visitors arriving in Vietnam to see their relatives up by 19,5%; and for other purposes up by 22,1%; in particular, people on business trips to Vietnam reduced by 19,9%. The major sources of tourists to Vietnam are from China, the US, ROK, Japan, Taiwan, Cambodia, Australia, France and Canada.

As of the end of February 2005, 24 centrally-governed provinces and cities accomplished primary education universalisation within schooling ages. 22 centrally-governed provinces and cities accomplished secondary education universalisation.

As for the number of education facilities of national standard: As of the end of the first term of 2004-2005 school year, on a national scale, there are 3119 primary schools of national standard, accounting for 21,5% of the total number of primary schools (the highest ratio is 45,5% recorded in the Red River delta; while that of the South East is 4,2% or the lowest in the country); there are 216 secondary schools of national standard, or 2,4% of the nation's high schools.

Avian influenza caused by A-H5N1 virus: in March 2005, there are 7 infected cases, 1 of those is dead. Since February, there have been 51 H5N1 infected cases, 33 of those have died.

Some major targets of the first 3 months (Up/down) as compared to 2004 same periods (%)

(Source: General Statistics Office)
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