Vietnam’s gross domestic product grew 13.67% in the third quarter from a year earlier, its fastest pace in decades, boosted by robust manufacturing and exports and a low base effect, government data showed on Thursday.
The manufacturing and construction sector grew by 12.91% in the period July-September from a year earlier, according to the General Bureau of Statistics (GSO) in a report. Meanwhile, the service sector grew 18.86%, while the agricultural sector grew 3.24%.
Vietnam’s GDP shrank by more than 6% in the third quarter last year due to the pandemic, but the regional manufacturing hub has seen a rebound since then.
Exports rose 17.3% in the first nine months of this year from a year earlier to $282.52 billion, while industrial production grew 9.6%, according to the GSO.
“Business activities in the third quarter saw strong growth, especially compared to the same period last year when several parts of the country were strictly closed due to the pandemic,” the GSO said.
But Vietnam is also experiencing upward inflationary pressures, which prompted the central bank to raise its key rate last week.
Fitch Solutions said this week it expected the central bank to raise interest rates further in the next two quarters.
“Like most other central banks in Asia, the (State Bank of Vietnam) is under significant pressure to tighten policy as a result of rising interest rates in the United States,” Fitch Solutions said.
“The current low inflation environment in Vietnam is unlikely to last much longer.”
Consumer prices rose 4.01% in September compared to the end of last year, according to the GSO.
The Southeast Asian country has set official targets for GDP growth this year at 6.0%-6.5% and inflation at 4%.
Capital Economics said in a note that new headwinds are emerging, including the risk of sharp currency depreciation, which could increase pressure on import prices. But it maintained its GDP growth forecast for Vietnam at 9.0% this year and 7.5% next year.
@ Reuters
