Vietnam’s economic growth accelerated faster than expected in the second quarter of this year. (Photo: VNA)Hanoi (VNA) - Vietnam’s economic growth accelerated faster than expected in the second quarter of this year, as a recovery in exports and manufacturing helped offset risks from coronavirus outbreaks and rising oil prices, Bloomberg reported.
The US-based news agency cited data from the General Statistics Office of Vietnam (GSO) saying the Vietnamese economy expanded 7.72% year-on-year in the April-June period, compared to 5.05% of the previous quarter.
That was quicker than the median estimate for a 5.9% gain in a Bloomberg survey, and the highest level since at least the first quarter of 2013, it said.
The performance helped lift growth in the first-half to 6.42% from a year ago, beating the GSO’s forecast for a 5.5% pace. The government targets full-year growth at 6%-6.5%.
The gains in momentum coincide with Vietnam emerging as one of the alternative destinations for foreign investment amid trade disruptions from China’s lockdowns, the war in Ukraine, and lingering tensions between Beijing and Washington.
The economy also benefited from fiscal stimulus worth about 347 trillion VND (15 billion USD), and an easy monetary policy that makes the State Bank of Vietnam one of the last few to resist the global tightening cycle.
“The economic recovery remained strong despite heightened global uncertainties,” the World Bank said in its June report on Vietnam. “Nevertheless, the authorities should be vigilant about inflation risks associated with continuing rise in prices of fuels and imports,” it said.
Earlier, the Asian Development Bank (ADB) maintained its forecast for Vietnam’s GDP growth at 6.5% in 2022 and projected the economy to further expand by 6.7% in 2023.
Much was expected of the economy last year, but the resurgence of COVID-19 has pulled down the GDP growth to just 2.6%, according to ADB Country Director for Vietnam Andrew Jeffries.
Vietnam’s economy is expected to rebound to 6.5% this year and further expand to 6.7% in 2023, due to the high vaccination rate, he said, adding that this will allow the government to implement more flexible virus control measures, push for trade expansion, further accelerate regional partnership and boost tourism.
He also highly spoke of the government’s Economic Recovery and Development Programme approved by the National Assembly in January.
The ADB, on the other hand, highlighted near-term downside risks that could cloud Vietnam’s recovery, for example, the high COVID-19 infections and the slowing global recovery that could affect Vietnam’s external trade.
Jeffries said that Vietnam’s macro-economy remains stable with improved investment environment and the help of multilateral free trade agreements. These factors would enable the country to lure more investment, boost foreign trade and support the economy recovery.
According to the report, a recovering labour market, along with monetary and fiscal stimulus measures of the government’s Economic Recovery and Development Programme, will spur industrial growth by a projected 9.5% in 2022. Agriculture output is expected to grow 3.5% this year, on revived domestic demand and rising global commodity prices.
The reopening of tourism in mid-March and easing of pandemic controls are expected to boost services, with the sector forecast to grow by 5.5% this year. Accelerated public funding disbursements will drive construction and related economic activities. In tandem with the economic revival and the uncertainty of global oil prices, inflation is expected to accelerate to 3.8% in 2022 and 4.0% in 2023.
The ADB forecast Asia’s developing economies to grow 5.2% this year and 5.3% in 2023, thanks to a robust recovery in domestic demand and continued expansion in exports. Inflation in the region remains manageable but is forecast to rise to 3.7% this year, before moderating to 3.1% in 2023./.
