Hanoi (VNS/VNA) - TheMinistry of Planning and Investment (MPI) lowered its estimate for Vietnam’sGDP growth to 6.58 percent in the first quarter of this year.

According to a report on theimplementation of Government Resolution No. 1 and the socio-economic situationin the first two months of the year, the rate was below the level of the lowgrowth scenario forecast in November last year.

In a low growth scenario, GDPthis year was expected to increase by 6.6 percent,in which industry and construction, the key sector of the economy, must grow8.75 percent, 8.91 percent and 7.63 percent in Q2, Q3, Q4, respectively, inorder to reach an average of 8.26 percent for the whole year.

With this growth, the country’sGDP would be 6.55 percent, 6.89 percent and 6.4 percent in Q2, Q3 and Q4,respectively.

"To achieve the economicgrowth rate at the proposed low growth scenario, ministries, sectors andlocalities must make their utmost efforts and take advantage of everyopportunity in the country and abroad,” the MPI said.

There needed to be a focus onimplementing measures to promote production and business in the remainingquarters of 2019. The industry and construction sector must grow higher thanthe scenario.

As for the high growth scenarioin which GDP in 2019 would increase 6.8 percentover the same period, the industry and construction sector must increase by9.11 percent, 9.28 percent, 8.02 percent in Q2, Q3 and Q4, respectively, inorder to reach an average of 8.57 percent for the whole year.

Accordingly, GDP in Q2, Q3 and Q4would be 6.77 percent, 7.13 percent and 6.7 percent, respectively.

According to the MPI, Vietnam’seconomy would continue to face many difficulties and challenges, including therisk of countries avoiding goods originating in Vietnam. In exports, a numberof businesses had been found to fraudulently claim goods are of Vietnameseorigin to avoid trade defence measures.

Supply chains were expected tochange as the US-China trade war continues, which would also affect Vietnam’seconomy.

The PMI report also showedinstitutional improvements, economic restructuring and transformation of thegrowth model had led to a strong transition, but challenges remained as thecountry’s economy integrated more deeply into the international arena.

New free trade agreements such asthe Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)and the EU-Vietnam Free Trade Agreement (EVFTA) demanded higher requirementsand the full implementation of international commitments. Meanwhile, the country’ssupport industry development was not yet commensurate with the requirements todeeply participate in the global production network and value chain.

The MPI said support for Vietnam’seconomic growth this year would mainly come from motivation in 2018 andcomprehensive economic growth, an improved investment and business environmentand the economy’s restructuring, adding new production capacities, expandinginternational trade activities and promoting the efficiency of the agriculturalsector.

In a report issued by Virt DragonSecurities Corporation (VDSC), the GDP growth in Q1 was forecast to be lowerthan the same period last year.

According to VDSC experts, thePrime Minister’s request for the State Bank of Vietnam to control credit growthat a reasonable rate and focus lending on the Government’s priority areas wouldbe important to boosting economic growth in the following quarters.

“Priority areas includeagriculture businesses, firms producing goods for export, small- andmedium-sized enterprises, enterprises operating in auxiliary industries andhigh-tech enterprises including start-ups,” the experts said.-VNS/VNA