* 2016 growth seen at 6.21 percent in 2016 vs 6.68 pct in
* Drought, floods, pollution disaster hurt farms, fisheries
* Q4 has best quarter growth in 2016 as agriculture picks up
* Trade balance swings back into surplus in 2016
(Adds details, analyst comments)
By Mai Nguyen
HANOI, Dec 28 Vietnam's economy expanded an
estimated 6.21 percent this year, slightly behind 2015 and
marking the first slowdown in four years, but a fourth-quarter
surge to 6.68 percent was the best for a year, keeping it among
Asia's fastest-growing economies.
Drops in agriculture and mining dragged full year growth
below last year's 6.68 percent and the government's target of
6.3-6.5 percent, the General Statistics Office (GSO) said on
"2016 GDP has not reached target or had any major
breakthroughs but in general the economy has had good growth
except for the agriculture and mining sectors," GSO head Nguyen
Bich Lam told reporters.
In 2015, Vietnam's economy had expanded at its fastest pace
since 2007 having maintained growth momentum since 2012. The
slower annual growth this year -- the first deceleration since
2012 - left Vietnam ranked behind India, China and the
The Statistics Office put the drop in pace down to adverse
weather, a marine environmental disaster and an unfavourable
"The 6.21 growth this year is actually not too bad given the
outside factors like weather and the international markets,"
said Tran Minh Hoang, chief economist at Vietcombank Securities.
"Next year growth may improve slightly to 6.3-6.5 percent as
the oil market stabilises and public spending increases," Hoang
Severe drought in the Central Highlands coffee growing
region, salination in the paddy fields of the Mekong Delta, a
cold spell in the north and floods in the central region also
trimmed farm sector growth to 1.36 percent in 2016, the
statistics office said.
Vietnam is the world's second largest coffee producer after
Brazil and ranks third behind India and Thailand in rice
exports. Other key foreign exchange earners include mobile
phones, textiles, footwear, fish and shrimp.
Vietnam's mining sector fell 4 percent this year on low
prices of coal and crude oil, after an increase of 6.5 percent
in 2015, while an enviromental disaster in April that was blamed
on the local steel-making unit of a Taiwanese conglomerate
FOURTH QUARTER GROWTH CUSHIONS SLOWS
On the bright side, October-December GDP growth was the best
this year as agriculture rebounded during the main rice harvest
season, and there was solid growth in manufacturing,
construction and services, which benefitted from a record 10
million foreign visitors this year, the statistics office said.
Retail sales grew 9.1 percent in 2016, while domestic credit
growth quickened to 18 percent as bank lending rose toward the
year-end, with construction firms active borrowers.
Attracted by cheap labour and tax incentives inflows of
foreign direct investment (FDI) struck a record $15.8 billion
this year. FDI was up 9 percent on last year.
South Korean investors pledged the most funds in 2016,
including $1.5 billion for LG Display's OLED screens
plant and by LG Innotek's $550 million camera plant.
Despite the chill in the global economy, exports grew a
respectable 8.6 percent in 2016 to total $175.94 billion, while
imports growth was a more modest 4.6 percent, totalling $173.26
billion. That left Vietnam, with an estimated trade surplus of
$2.68 billion for this year, compared with a deficit of $3.63
billion in 2015.
GSO's Lam noted, however, that Vietnam's increasing exposure
to international trade meant it was more vulnerable to any
threats of protectionism that might arise out of the election of
Donald Trump as U.S. president, and Britain's vote to leave the
($1 = 22,770.0000 dong)
(Reporting by Mai Nguyen; Additional reporting by Ho Binh Minh
and My Pham; Editing by Simon Cameron-Moore)