One of Vietnam’s largest environmental disasters, which wiped out marine life off the central coast, has been dragging the gross domestic product down and may continue to do so for a long time, Nguyen Bich Lam, head of the General Statistics Office, said at a press conference on Thursday.
Vietnam’s economy is widely seen as among the most resilient in Asia, but newly released statistics show it has cooled down. January-September growth was 5.93%, compared to 6.53% in 2015, said the statistics office.
The agriculture sector took a hard hit from adverse weather conditions. The environmental incident caused by Taiwan-owned steel factory Formosa along a 200km stretch of Vietnam's central coast then added an extra blow to aquatic farming.
Nationwide fishing output edged up 2.9% in the first nine months to 233,000 tons from the same period last year as other fishing regions saw increases. But the environmental disaster has halted fishing along Vietnam’s central coast and destroyed the livelihoods of thousands of fishermen in the affected region.
Official figures show that in Ha Tinh Province, about 400 kilometers south of Hanoi and one of four central coastal provinces to have suffered from the environmental disaster, fishing output has fallen by 14.4%. In Quang Binh it has dropped 13.4%, Thua Thien-Hue 23.9% and Quang Tri 27.1%.
“The incident has badly affected the agricultural sector in general and the fishery industry in particular, dragging the gross domestic product down,” local media quoted Lam as saying. He added that “the impacts of the incident will last for years, affecting a number of industries including tourism.”
The official did not say exactly to what extent the disaster would affect the country’s GDP number.
The steel plant, owned by the Formosa Plastics Group, accepted responsibility for the incident in June and pledged to pay $500 million to clean the pollution and compensate affected people.
The government said in a report in July that the disaster harmed the livelihoods of more than 200,000 people, including 41,000 fishermen.
Vietnam’s growth from January to September was slower than the same period last year due to a slowdown in the agriculture and mining sectors, said Ha Quang Tuyen, a senior statistics official.
The mining sector dipped by 3.6% on-year, cutting into GDP growth by 0.28%.
Vietnam has heavily relied on exports of coal and crude oil to fuel its economic growth, but the sharp decline in world commodity prices has shifted its attention to manufacturing and business as the main drivers of the economy, said Tuyen.
The Asian Development Bank earlier this week predicted that Vietnam’s economy will likely grow 6% this year, down from the ADB’s June forecast of 6.7%.
Tuyen was not inclined to agree with the ADB’s latest estimate, saying that the Manila-based lender has revised down its forecast mainly based on first-half data.
“First-half growth cooled to an estimated 5.52 %, but we saw a recovery in the third quarter and we expect a surge in the fourth quarter. Hence the 2016 GDP will be higher than the ADB’s estimate,” said Tuyen.
The statistics official added that the ambitious growth target of 6.7% would be out of reach.
“This year’s GDP will be lower than the target. Revenue from crude oil will determine how far below the target it will be,” said Tuyen.