Two men load bags of rice into a container for export in southern Vietnam. Photo: Diep Duc Minh
Vietnam’s economic growth quickened in the third quarter, buoyed by foreign investments and exports growth that contrasts with the performance of many of its neighbors.
Gross domestic product rose 6.81 percent in the third quarter from a year earlier, according to figures released by the Hanoi-based General Statistics Office Tuesday that complements other signs of an economic pickup. That compares with a revised 6.47 percent pace in the second quarter this year. Vietnam typically releases growth estimates before the end of the quarter, weeks ahead of its peers, and the numbers are often revised later.
“Vietnam is the only country with strong export growth amid contracting exports among its regional peers,” according to a Australia & New Zealand Banking Group Ltd. research note earlier this week.
In a bid to safeguard exports and support government efforts to boost economic growth to a four-year high of 6.2 percent in 2015, the central bank weakened the dong’s reference rate in August for the third time this year, widening the currency’s trading band after China devalued the yuan. The country is also benefiting from cheaper energy costs as disappearing inflation aids domestic demand.
The faster growth numbers failed to lift Vietnam stocks, which joined Asian markets in a tumble Tuesday with a selloff in commodity companies. The benchmark VN Index dropped 0.7 percent at the close. Vietnam’s stocks are poised to resume gains that have made the benchmark equity index Asia’s best performer this year, according to analysts in a Bloomberg survey.
In the nine months through September the economy grew 6.5 percent, compared with the median estimate of 6.4 percent in a Bloomberg survey.
Economic performance in numbers
• Exports rose 9.6 percent in the nine months through September from a year earlier to $120.7 billion, with 71% coming from foreign companies
• Imports climbed 15.9 percent from a year earlier for the same period
• September trade deficit was $100 million, from $347 million surplus in August
• Retail sales gained 9.8 percent in Jan.-Sept. from year earlier
• Industrial production jumped 10.1 percent in same period from year earlier
• Pledged foreign investment surged 53.4 percent in Jan.-Sept. from a year earlier, and disbursed foreign investment climbed 8.4 percent
Vietnam is forecast to post the strongest economic growth this year of six major Southeast Asian countries tracked by the Asian Development Bank in a recent report. The country’s growth is expected to accelerate through the second half, underpinned by rising private consumption, export-oriented manufacturing, and FDI, the ADB said.
Inflation dwindled to zero this month for the first time ever. Low prices have spurred retail sales but may pose a risk if sustained, said Huynh The Du, lecturer at the Fulbright Economics Teaching Program in Ho Chi Minh City. “It’ll become a challenge for economic expansion later if inflation continues to stay at this slow pace.”