Vietnam quarterly growth hits two-year high on exports, investment
06 October, 2024
Vietnam reported its strongest economic growth in two years in the quarter to end-September, as strong exports and industrial production and rising foreign investment offset the effects last month of Asia's strongest typhoon so far this year.
Vietnam's economy grew 7.4% year-on-year in Q3, driven by strong exports, industrial production, and rising foreign investment. Despite Typhoon Yagi's impact, exports rose 10.7%, and foreign investment inflows increased 8.9%.
Gross domestic product grew 7.4 per cent year-on-year in the third quarter, surpassing the second quarter's revised 7.09 per cent expansion, the government's General Statistics Office said in a report.
Vietnam is a regional manufacturing hub for multinational corporations including Samsung Electronics and Apple suppliers Foxconn and Luxshare, and has drawn a steady influx of foreign investment. "The world economy is stabilising as global trade in goods improves, inflationary pressures ease, financial conditions continue to loosen and labour supply increases," the statistics office said.
Data for September showed that exports rose 10.7 per cent from a year earlier while industrial production was up 10.8 per cent, it said.
Foreign investment inflows in the first nine months of this year rose 8.9 per cent from a year earlier to US$17.3 billion.
Northern Vietnam has been reeling from the impact a month ago of Typhoon Yagi, which killed more than 300 people, disrupted power supplies and halted industrial production. Authorities estimated property damage at US$3.3 billion.
S&P Global's purchasing managers index (PMI) for Vietnam manufacturing fell to 47.3 in September from 52.4 in August, the biggest decline in the indicator of the sector's health since November last year.
"The storm brought an end to a period of strong growth in the sector," said Andrew Harker, director at S&P Global Market Intelligence. "Heavy rain and flooding caused temporary business closures and delays to both supply chains and production lines."
Vietnam is targeting GDP growth of 6.0 per cent to 6.5 per cent this year and aims to keep inflation below 4.5 per cent.
Consumer prices in September rose 2.63 per cent from a year earlier, the statistics office said in its Sunday report. Retail sales rose 7.6 per cent.
For the first nine months of this year, exports rose 15.4 per cent from a year earlier to US$299.63 billion while imports were up 17.3 per cent at US$278.84 billion, for a trade surplus of US$20.79 billion, the office said.
The International Monetary Fund late last month forecast Vietnam's GDP growth at 6.1 per cent this year, while the Asian Development Bank put it at 6.0 per cent.
This year's growth is "supported by continued strong external demand, resilient foreign direct investment, and accommodative policies", the IMF said in a report.
Both the IMF and the ADB, however, warned that geopolitical tensions and uncertainties could hurt external demand, Vietnam's key growth driver.
Source: www.channelnewsasia.com
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