(VOVworld) – The Vietnamese economy witnessed positive changes in the first half of the year in which GDP increased nearly 6.3% against the same period last year. It’s also the highest rate since 2011. It’s predicted that Vietnam will face more challenges during the remaining months but the outcome might be a boost for businesses and foreign investors.

Vietnam’s economic achievements over the past six months were attributed to the increase in three areas, of which industry and construction posted an impressive growth rate of 9%, service 5%, and agriculture, forestry, and seafood nearly 2.4%.

The index of industrial production posted a strong rise at 9.6%, much higher than the last two years. The development of businesses recorded active signs with 45,400 newly-registered enterprises, contributing more than 60% to GDP.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry, said: “although businesses are still facing many difficulties, their confidence has gradually improved. Many of them are planning to expand production and trading with performance being relatively positive. I think such confidence will continue to be fostered by the government’s efforts to speed up the renovation and open its market as part of free trade agreements that Vietnam has signed or will do in the future.”

By the end of June, the average consumer price index (CPI) increased 0.86% against the same period last year. The rise is said to be rather low compared to the recent decade, helping the government control inflation, reform the way to set price for public products and services in line with market mechanism, and reduce input costs for companies.

In spite of positive performances in the early 2015, the Vietnam economy is being posed to numerous challenges in the following months, requiring the government and enterprises to endeavour to complete the targets set for this year.

A farmer tries to irrigate his rice field with the hope of fighting drought in the southernmost province of Ca Mau. (Photo: Ho Cau/VNA)

Particularly the agricultural sector is predicted to see more difficulties, according to Doctor Tran Dinh Thien, director of the Vietnam Economic Institute.

He said that “the biggest and objective risk is natural calamity which will affect agriculture and social stability. Lack of water will cause difficulties for not only agriculture, but also industry and service because electricity and water are essential to daily activities. This year the El Nino pattern and abnormal heatwave will have direct impacts on agricultural production.”

Vietnam has set a GDP growth of 6.2% and above. The Ministry of Planning and Investment has put forth three scenarios for Vietnam’s economic growth under which if agriculture continues to face difficulty due to drought, crude oil exploitation remains the same in the first half of this year, Vietnam will find it hard to fulfill the set growth target of 6.2%.

Second if the agricultural sector keeps having difficulties, Vietnam will outline policies to step up the mineral industry, export market. It means Vietnam will likely achieve the 6.2% target. The third scenario is that Vietnam will obtain a growth higher than the target set by the National Assembly.

But to that end, it requires more efforts and flexibility of ministries and relevant agencies, and especially the coordination of fiscal and monetary policies and measures to prevent illegal imports and counterfeit goods.

Director General of the General Statistics Office Nguyen Bich Lam commented on the second scenario which, he said,“is more feasible above all because the Ministry of Industry and Trade has recently signed a trade deal with the Republic of Korea under which Vietnam can export more seafood to this market. Second we hope that by the end of this year, the European market will import our farm produce including seafood to prepare for their New Year holiday. From now to the year-end, the government will facilitate the best possible conditions for agriculture and work out solutions to intensify exports and minimize imports. By this way, the Vietnamese economic panorama will become more satisfactory.”

Despite advantages in the short-term, Vietnam’s economic growth is facing risks in the long run. To restore the growth rate for this year and coming  years, the government has issued flexible monetary and financial policies, improved business environment, restructure state-owned enterprises, the financial and banking system, and remove barriers for the private economic sector.