Jan. 3 (Bloomberg) -- Vietnam's economy expanded last year
at the fastest pace in almost a decade, led by gains in
construction, tourism and telecommunications.
Gross domestic product grew 8.4 percent in 2005, according
to preliminary figures released by the General Statistics Office
in Hanoi. The figure is up from a 7.8 percent expansion in 2004
and is the fastest since 1996, the Statistics Office said.
Vietnam, which has cut poverty in half since 1993, wants to
move out of the ranks of the world's lower-income nations by
2010. The government aims at achieving the target by spurring
economic growth higher than the 7 percent average in the five
years between 2000 and 2004 even as inflation exceeds forecasts.
``Vietnam is poised to move out of the ranks of the poor
countries to take its rightful position among the successful
developers of East Asia,'' said Jordan Ryan, the United Nations'
Development Program's outgoing resident representative for
Vietnam, in remarks at a conference last month in Hanoi.
Gross domestic product in the country of 84 million people
could grow more than 10 percent annually if inefficiencies in
the economy are eliminated, the World Bank said last month.
``Vietnam's economic growth rate is still low compared with
the country's development potential,'' Minister of Planning and
Investment Vo Hong Phuc said in written answers to questions
from Bloomberg News. ``Vietnam has many advantages that could
allow us to develop even faster than China.''
Accelerating economic growth helped push Vietnam's
inflation rate to 8.4 percent in December from a year earlier.
The government has originally targeted keeping inflation below
6.5 percent last year.
Industry and construction -- which now make up 41 percent
of the Southeast Asian nation's economy, up from 38 percent in
2001 -- expanded 10.6 percent last year, with the category for
construction alone growing 10.8 percent.
``If the market for construction materials develops in the
future, it will be very good for the country in general,'' said
Pham Trong Nhan, general director of Nhi Hiep Brick-Tile Joint-
Stock Co., in an interview on Dec. 16. ``The more the country
develops, the more our industry will grow.''
Processing industries, a category that includes Vietnam's
garment industry, grew 13.1 percent last year, according to the
Statistics Office. Garments and textiles are Vietnam's second-
biggest export industry after crude oil, with overseas shipments
rising 10 percent in 2005.
Services, which account for 38 percent of the Vietnamese
economy, expanded at an 8.5 percent rate, up from a 7.3 percent
growth rate in 2004, the Statistics Office said.
``I see services growing faster than the economy overall,''
in the future, said Il Houng Lee, Hanoi-based senior resident
representative of the International Monetary Fund in Vietnam, in
a Dec. 27 telephone interview. ``There have been many
developments in areas such as telecommunications and tourism.''
The hotel and restaurant trade jumped to a 17 percent
growth rate, up from 8 percent growth in 2004, while a category
including tourism grew 9.6 percent, up from 8.1 percent in 2004.
The number of foreign visitors to the country grew by 18 percent,
buoyed by a 29 percent surge in tourist arrivals, according to
the Statistics Office.
``We see an influx of traffic coming from the United
States,'' said Joe Mannix, Vietnam country manager for United
Airlines, speaking to journalists in Ho Chi Minh City on Dec. 9.
``Our advanced passenger load factors are ahead of last year for
Agriculture, forestry and fisheries -- which accounts for
21 percent of the Vietnamese economy, down from 23 percent in
2001 -- grew 4 percent last year.
``I would expect to see a slight decline in agriculture as
a percentage of the Vietnamese economy,'' said the IMF's Lee.
``In the agricultural sector, I don't foresee any rapid
increases in productivity.''