HANOI, Sept. 30 (Xinhua) -- Vietnam is unlikely to realize its GDP growth target of 6.7 percent for 2016, mainly due to difficulties in mineral mining and agriculture, Vietnamese and foreign institutions have predicted.
The economy gradually grew in the first three quarters but made no breakthrough, with GDP in the third quarter declining 0.6 percent year-on-year, Vietnam's General Statistics Office said Thursday.
A key reason is weaker mining and agriculture sectors. Growth in the mining sector dropped 3.6 percent because of smaller crude oil output and slower coal consumption due to lower prices. Agriculture grew only 0.65 percent in the first nine months, the lowest rate in six years.
The Vietnamese economy grew 5.48 percent in the first quarter, 5.78 percent in the second, and some 6.4 percent in the third. The country will find it really hard to attain the 6.7-percent growth target set by top legislature at the beginning of the year.
"The target is only feasible if we increase crude oil output in the three remaining months of this year," Ha Quang Tuyen, head of the National Account Statistics Department under the General Statistics Office, said. He also cited increasing import of materials and machines, as well as new enterprises and firms reopening after a period of halting operations, as two main factors to refuel the country's economic growth in the last few months.
The country's economy in the coming years will be hampered by agriculture if no proper measures are taken to speed up agricultural restructure, apply more advanced technologies, and better respond to climate change, Tuyen said.
The World Bank (WB) has predicted a 6-percent growth for Vietnamese economy this year, blaming severe drought and slower industrial growth for the slowdown.
Over recent decades, Vietnam's gains in smallholder rice productivity and intensification are a source of envy for many developing countries, the WB said earlier in September.
Vietnam has emerged as one of the world's leading exporters of agro-food commodities, ranking in the top five for aquatic products, rice, coffee, tea, cashews, black pepper, rubber, and cassava.
"Nevertheless, there are growing concerns related to the quality and sustainability of Vietnam's agricultural growth and related patterns of development," the bank said in a statement.
"A comparatively low quality of growth is manifested by low smallholder farmer profitability, considerable under-employment among agricultural workers, mixed or uncertain product quality and food safety, generally low value addition, and limited technological or institutional innovation."
Growth rates in agricultural GDP and total factor productivity have been slowing. The impact on environment has become visible: deforestation, biodiversity loss, land degradation, water pollution, and greenhouse gas emissions, the World Bank said.
The Asian Development Bank (ADB) has also predicted a growth of 6 percent, revising its June forecast of 6.7 percent.
The country's agriculture sector and mineral mining were hard hit by adverse weather conditions, especially the worst drought and saltwater intrusion in almost a century, the bank noted.
Vietnam's Central Institute for Economic Management cited the gloomy world economy, the seawater encroachment in the Mekong Delta, drought and the introduction of new polices and management methods for the economy slowdown.
Vietnam needs further reform to create an attractive and competitive business and economic environment, Adam Sitkoff, executive director of the American Chamber of Commerce (AmCham) in Hanoi, recently told Xinhua.
The country should fulfil its commitments for regulatory and state-owned enterprise reforms, and take actions that enable and facilitate, rather than restrict business opportunities.
"AmCham believes that the TPP (the Trans-Pacific Partnership), EVFTA (the Vietnam-European Union Free Trade Agreement) and RCEP (the Regional Comprehensive Economic Partnership) all offer Vietnam new opportunities for economic growth and working to prepare for them is important," said Sitkoff.
