Strong Economic Growth in Vietnam

By Khanh Vu and Phuong Nguyen

HANOI (Reuters) – Vietnam reported its strongest economic growth in two years for the quarter ending September, driven by robust exports, industrial production, and rising foreign investment, despite the recent impact of Typhoon Yagi.

Key Highlights

• GDP Growth: 7.4% year-on-year in Q3, surpassing Q2's 7.09% growth, according to the General Statistics Office.
• Manufacturing Hub: Vietnam serves as a regional manufacturing hub for multinational corporations like Samsung Electronics and Apple suppliers.
• Global Economic Stabilization: The statistics office noted improvements in global trade, easing inflation, and increased labor supply contributing to growth.

Economic Indicators

• Exports: Increased by 10.7% year-on-year in September.
• Industrial Production: Rose by 10.8% in September.
• Foreign Investment: Inflows for the first nine months reached $17.3 billion, up 8.9% from last year.

Impact of Typhoon Yagi

• Typhoon Yagi negatively affected Northern Vietnam a month ago, resulting in over 300 fatalities, widespread power disruptions, and industrial production halts, leading to an estimated $3.3 billion in property damage.
• The S&P Global PMI for Vietnam manufacturing fell from 52.4 in August to 47.3 in September, marking the largest decline since November.

Economic Forecast

• Vietnam targets GDP growth of 6.0% to 6.5% for the year, with inflation aimed to remain below 4.5%.
• Consumer prices increased by 2.63% year-on-year in September; retail sales rose by 7.6%.
• For the first nine months, exports climbed 15.4% to $299.63 billion, and imports rose 17.3% to $278.84 billion, yielding a trade surplus of $20.79 billion.

Economic Projections

• The IMF projects Vietnam's GDP growth at 6.1%, while the ADB estimates it at 6.0%. Both organizations highlight strong external demand and resilient foreign investment as growth supports, albeit cautioning on geopolitical tensions affecting demand.