CPI merely rises by 2.79 percent in 2019

2019 is the second consecutive year that the economic growth of Vietnam was above 7 percent since 2011. Particularly, the gross domestic product (GDP) of Vietnam grew 7.02 percent while the consumer price index (CPI) merely rose 2.79 percent.

However, CPI in December this year climbed by 1.4 percent over the previous month, the highest level in the past nine years.

According to the General Statistics Office of Vietnam, this year, newly-established enterprises saw increases in the quantity, the amount of registered capital and the number of employees compared to last year.

Of which, the number of newly-established enterprises hit a record of 138,100 enterprises with average registered capital of VND12.5 billion, the highest level in the past few years. The main motivation of economic growth continued to be the processing and manufacturing industry with an increase of 11.29 percent and market service industries, including transporting and warehousing industry with an increase of 9.12 percent, wholesale and retail with an increase of 8.82 percent and finance, banking and insurance with an increase of 8.62 percent.

As for economic structure, this year, the agro-forestry-aquatic sector accounted for 13.96 percent of GDP; industrial and construction sector 34.49 percent; service sector 41.64 percent; and gross value-added 9.91 percent while it was 14.68 percent, 34.23 percent, 41.12 percent and 9.97 percent respectively last year.

Final consumption expenditure rose by 7.23 percent over the previous year; asset accumulation surged 7.91 percent; exports of goods and services edged up 6.71 percent; and imports of goods and services went up 8.35 percent.

Regarding the quality of economic growth, in 2019, the contribution of total factor productivity (TFP) to GDP growth reached 46.11 percent. The average TFP of the period from 2016 to 2019 reached 44.46 percent, much higher than the average level of 33.58 percent of the period from 2011 to 2015. The labor productivity of the whole economy at the current prices is estimated at VND110.4 million per labor (US$4,791 per labor, an increase of $272 compared to last year). At constant prices, labor productivity rose by 6.2 percent as the workforce was added and the number of employed laborers highly increased.

Investment efficiency was improved with new production capacities added to the economy. The incremental capital-output ratio (ICOR) declined from 6.42 in 2016 to 6.11 in 2017 and to 5.97 in 2018 and is estimated to be at 6.07 in 2019. The average ICOR in the period from 2016 to 2019 was at 6.14, much lower than an average of 6.25 in the period from 2011 to 2015.

Meanwhile, inflation was controlled at a low level, the average CPI of this year merely rose by 2.79 percent, the lowest level in the past three years. CPI in December surged by 1.4 percent compared to the previous month, the highest level in the past nine years. Of which, restaurants and catering services posted the highest growth of 3.42 percent as the African swine fever caused a decrease in pork supply and an increase in prices of pork products and pork alternatives. In the last quarter of this year, CPI climbed 2.01 percent compared to the previous quarter and 3.66 percent compared to the same period last year. On average, CPI increased by 2.79 percent compared to last year, below the target set by the National Assembly of Vietnam.