Article originally posted on Bloomberg Business.
Vietnam’s economic growth accelerated this quarter, boosted by foreign investments and rising exports.
- Gross domestic product rose 6.4 percent in the third quarter from a year earlier, up from 5.78 percent in the previous three months, the General Statistics Office said in Hanoi Thursday.
- In the nine months through September, the economy grew 5.93 percent, compared with the median estimate of 5.83 percent in a Bloomberg survey of four economists.
The Big Picture
Growth is being buoyed by rising foreign direct investment and exports, stronger credit demand and a slight recovery in agriculture following a crippling drought. Vietnam’s economy has benefited in the past five years from companies such as Samsung Electronics Co. setting up plants in the country, transforming it into a manufacturing hub for electronics goods, including smartphones.
- “We expect Vietnam to remain a growth outperformer, bucking regional weakness in trade,” said Eugenia Victorino, an economist at Australia & New Zealand Banking Group Ltd. in Singapore. “Reforms are slowly instituted which should prop up potential growth further in the medium term.”
- “The jump comes from a rebound of the agriculture sector after a drought suppressed growth,” said Trinh Nguyen, a senior economist for emerging-market Asia at Natixis SA in Hong Kong. “The industrial sector remains a key bright spot, with construction, manufacturing and electricity pulling through. Vietnam manufacturing is indeed a regional bright spots – exports are expanding despite the regional and global gloom. Wage cost competitiveness is the key region that it is attracting capital from countries that have worsening demographic transitions in East Asia.
- Manufacturing rose 11 percent in January to September from a year earlier, while agriculture rose 0.05 percent. In the first half of the year, farm output shrank
- Disbursed foreign direct investment rose 12 percent in January to September from a year earlier
- Exports increased 9 percent in September from a year earlier, with sales of electronics surging 29 percent
- Vietnam posted a trade deficit of $100 million for September. For the first nine months of the year, it had a trade surplus of $2.77 billion