[Asia Economy Reporter Jeong Hyunjin] Vietnam, known as the 'factory of the world,' recorded an economic growth rate of 13.67% in the third quarter (July to September) of this year, according to reports by Bloomberg and others on the 29th. Despite global recession concerns, the country showed double-digit growth centered on manufacturing.
According to the report, the Vietnam General Statistics Office announced that the GDP growth rate for the third quarter was 13.67%. This marks a significant turnaround from a 6.02% decrease in GDP in the third quarter of last year due to factory closures caused by the spread of COVID-19. The Vietnam General Statistics Office explained, "Industrial activity in the third quarter of this year showed strong growth compared to the strict lockdown measures during the pandemic in the third quarter of last year."
Looking at the GDP growth rates announced by the Vietnamese government for the first half of this year, the first quarter was 5.05%, and the second quarter was 7.83%. The Vietnamese government revised the second quarter GDP growth rate upward by 0.11 percentage points on the 12th. The government's GDP growth target for this year is around 6.0 to 6.5%.
By sector, the industry and construction sector grew by 12.91% year-on-year, the service sector increased by 18.86%, and the agriculture sector rose by 3.24%. Exports increased by 10.3% year-on-year, and imports rose by 6.4%. Foreign direct investment (FDI) spending from January to September this year totaled $15.43 billion, up 16.3% compared to the same period last year.
While the US, Europe, and other parts of the world are engulfed in recession fears this year, Vietnam's economy is showing solitary growth. The US-China trade war that began in 2018 and China’s strict ‘zero COVID’ policy have shifted demand from China to Vietnam, driving the Vietnamese economy.
The World Bank (WB) recently revised Vietnam’s GDP growth forecast for this year upward from 5.3% to 7.2%. The International Monetary Fund (IMF) also raised its forecast from 6% in April to 7% in July. The British publication The Economist reported that "Vietnam is emerging as a winner in the era of deglobalization."
Despite this growth, the Vietnamese government is taking preemptive measures in anticipation of future inflation increases. The consumer price index (CPI) inflation rate announced on this day was 4.01% in September. The government has set an inflation target of 4%. The State Bank of Vietnam recently raised the benchmark interest rate by 1 percentage point to manage prices.
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