Vietnam Rejoins Club of 6%-GDP-Growth Nations as Exports Surge

Updated on
  • Shipments gain more than 20% every month in the second quarter
  • Government boosting business climate to lure more investment

Vietnam’s economy recovered this quarter with a surge in exports allowing it to rejoin a small group of nations posting growth rates of more than 6 percent.

Highlights of GDP report

  • Gross domestic product rose 6.17 percent in the second quarter from a year earlier, compared with a revised 5.15 percent in the previous three months, the General Statistics Office said in Hanoi on Thursday
  • The economy expanded 5.73 percent in the six months through June

Key Takeaways

Vietnam’s government is taking steps to boost growth after Samsung Electronics Co.’s production cuts hurt the economy in the first quarter, underscoring the nation’s dependence on exports. Prime Minister Nguyen Xuan Phuc in May said officials were preparing strategies to boost electronics and agriculture, while improving the business climate to lure more investment.

While the World Bank forecasts expansion will exceed 6 percent this year until 2019, rising trade protectionism poses a risk and shallow policy buffers are a concern to some extent, it said this month. The nation is also vulnerable to environmental disasters, such as the crippling drought last year that hurt agriculture and fanned inflation.

Click to read how the premier is confident of meeting the growth target

In Asia, economies growing more than 6 percent a year include China, India and the Philippines.

Economist View

  • “Growth rates of around 6 percent over the next two years is possible,” said Eugenia Victorino, an economist at Australia & New Zealand Banking Group Ltd. in Singapore. “The key to a resilient growth model is diversification in export markets and product mix.”

Other Details

  • Manufacturing rose 12.1 percent in the second quarter from a year earlier, as Samsung boosted production of the Galaxy Note 8
  • Exports increased more than 20 percent every month this quarter
  • Vietnam posted a trade deficit of $200 million in June. In the first half of the year, it had a trade deficit of $2.7 billion
  • Consumer prices rose 2.54 percent in June from year earlier. The government aims to cap average price gains at 4 percent this year

— With assistance by Norman P Aquino

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