Vietnam’s gross domestic product grew 9.95% in the third quarter from a year earlier, the fastest quarterly growth since the COVID pandemic, and accelerating from a revised expansion of 8.81% in the second quarter, government data showed on Saturday.
Growth in the July-September quarter was driven by strong exports and robust investment in infrastructure, but remains short of the country’s full-year growth target of above 10%.
The export-reliant economy has faced rising import costs this year due to the Iran war, with the trade deficit in the first nine months of this year hitting a record high.
Exports of goods in September rose 39.1% from a year earlier to $59.48 billion, while imports were up 45.8% to $58.21 billion, resulting in a trade surplus of $1.27 billion for the month, the National Statistics Office said in a report.
For the first nine months of this year, exports rose 24.5% to $434.30 billion, while imports were up 36.7% to $453.72 billion, translating into a trade deficit of $19.42 billion, a record high.
Higher prices for energy imports were partly to blame for the widening trade deficit. Imports of crude oil in the period fell 13.5% in volume, but were up 14.4% in value, according to the report. Imports of refined fuels rose 11.5% in volume but were up 79.3% in value.
Consumer prices in September rose 5.08% from a year earlier, the NSO said. Industrial production in September increased 16.7% year on year, it added.
The data showed total investment in the nine-month period rose 16.7% from a year earlier, as the country has been ramping up public investment in infrastructure as part of its efforts to boost growth.
Foreign investment inflows in the nine-month period rose 12.1% from a year earlier to $21.1 billion, the NSO said.
The Asian Development Bank, which last week raised its forecast on Vietnam’s economic growth for this year to 7.8% from 7.2%, said the country’s near-term growth prospects remain robust, underpinned by continued expansion in manufacturing, buoyant domestic consumption, and sustained foreign direct investment.
However, for the longer term, it said “weaker global demand and heightened external uncertainty could weigh on growth, while higher energy prices and tighter global financial conditions could add to inflation and exchange-rate pressures.”
Laura Schwartz, senior Asia analyst at risk intelligence company Verisk Maplecroft, said concerns are rising around Vietnam’s economy potentially running too hot, particularly given accelerating inflation in recent months.
“Potential electricity shortfalls in the near- and mid-term will also pose significant challenges,” she added.
Source: Reuters
