Vietnam’s economic growth unexpectedly accelerated last quarter, buoyed by manufacturing and exports before a super typhoon last month caused widespread damage and prompted warnings of a challenging end to the year.
GDP rose by 7.4 percent in the three months ended September from a year earlier, the General Statistics Office (GSO) of Vietnam said yesterday. That compares with a 6.1 percent median estimate in a Bloomberg survey and a revised 7.09 percent expansion for the second quarter.
Vietnam’s economy has shown resilience this year as investment pours in, with Vietnamese Prime Minister Pham Minh Chinh vowing to cut logistical costs and improve infrastructure.
Photo:EPA-EFE
The government has sought to pull in capital from foreign tech giants such as Samsung Electronics Co and Intel Corp as the country emerges as a viable alternative to China in the production of electronics, from smartphones to basic semiconductors.
Investment and industry, especially manufacturing, were among “the driving forces for growth” in the third quarter this year, the GSO said.
Big gains in agriculture and other sectors in July and August helped limit the effect of serious damage to crop output from Super Typhoon Yagi last month, GSO head Nguyen Thi Huong said.
Yagi battered Vietnam’s northern provinces, killing hundreds and wreaking economic damage that is estimated at more than US$3 billion. Factory activity in the trade-reliant economy contracted for the first time in five months last month, reflecting the severity of the storm, according to an S&P Global purchasing managers’ index report.
The government’s latest GDP growth target of 6.8 percent to 7 percent for this year would be “a big challenge” as the impact of Yagi, geopolitical tensions and global economic concerns weigh on expansion, Huong said at a briefing in Hanoi.
Authorities earlier predicted a hit of 0.15 percentage points to this year’s growth.
The State Bank of Vietnam might “turn more dovish” by lowering interbank interest rates to aid the economy after Yagi, Mitsubishi UFJ Financial Group Inc said.
The IMF expects Vietnam to grow 6.1 percent this year, slightly faster than its previous estimate, supported by “continued strong external demand, resilient foreign direct investment and accommodative policies,” it said on Sept. 27.
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