Big leap also benefited from year-earlier contraction and consumer spending
Recovery in private consumption contributed Vietnam’s double-digit growth in the third quarter. © AP
TOMOYA ONISHI, Nikkei staff writerSeptember 29, 2022 11:11 JSTUpdated on September 29, 2022 11:56 JST
HANOI — Vietnam’s economy as measured by gross domestic product grew 13.67% in real terms in the July-September period from a year earlier as exports to the U.S. surged, the government said on Thursday.
A sharp recovery in personal consumption also contributed to the first quarterly growth of more than 10% since 2009, when comparable data began to be compiled, according to the General Statistics Office of Vietnam.
The upswing came after the nation’s economy expanded 7.83% in the April-June quarter, an upward revision of 0.11 of a percentage point, according to the statistics office.
Another reason for the steep ascent was a 6.03% contraction in the third quarter of 2021 due to strict measures to contain COVID-19. The government has been relaxing those measures step by step, with growth picking up as it does.
In addition to reactional growth from the previous year’s contraction, “the export-based Vietnamese economy is benefiting from a global economic recovery,” said Yusuke Koshiyama, an economist at Mizuho Research and Technologies.
The nation’s economic growth is being led by exports to the U.S., which in the January-September period expanded 25.4% from the same period of 2021.
Domestic consumption is also on a roll. In August, retail sales, including services, grew 50% year-on-year. Vietnam eased entry restrictions for foreigners ahead of neighboring countries and now expects the number of visitors from China, South Korea and Japan to increase. Tourism accounts for about 10% of the nation’s GDP, and the sector is likely to gain strength.
Price increases resulting from Russia’s war in Ukraine are not greatly affecting Vietnam’s economy. The consumer price index rose 2.89% in August from a year earlier, with inflation being kept more or less in check by gasoline price controls and tax cuts.
But if food and resource prices climb, overall inflation could act as a drag on growth.
In early September, the International Monetary Fund raised its projection for Vietnamese growth in 2022 to 7%, up 1 percentage point from three months earlier. It called the country’s inflation environment relatively subdued and took note of ongoing recoveries in manufacturing, retailing and tourism.