Vietnam's Q1 GDP growth tops 5%

Vietnam's Q1 GDP growth tops 5%

Customers at an outdoor coffee shop near Notre Dame Cathedral in District 1 in Ho Chi Minh City, Vietnam, on Monday. (Photo: Bloomberg)
Customers at an outdoor coffee shop near Notre Dame Cathedral in District 1 in Ho Chi Minh City, Vietnam, on Monday. (Photo: Bloomberg)

HANOI: Vietnam's gross domestic product grew 5.03% in the first quarter from a year earlier, official data showed on Tuesday, as the Southeast Asian country reopened more parts of its economy after relaxing coronavirus restrictions.

The pace of economic growth beat the 4.72% recorded in the first quarter last year and compared with 5.22% in the fourth quarter of 2021.

"Vietnam gained fairly good growth in the first quarter despite the complicated evolvement of the Covid-19 pandemic... and global geopolitical uncertainty," the General Statistics Office (GSO) said in a report.

The manufacturing and construction sector grew 6.38% from a year earlier, while services expanded 4.58% and agriculture by 2.45%, the GSO said.

Vietnam, a manufacturing hub in the region, began lifting its coronavirus restrictions from late last year, allowing factories to resume full operations.

"Unlike during the Delta wave, a successful vaccine rollout has allowed the government to keep service and industrial sectors open," Capital Economics said in a note, referring to the more recent coronavirus outbreak driven by the Omicron variant.

Exports in the first quarter rose 12.9% from a year earlier to $88.58 billion, while imports were up 15.9% to US$87.77 billion, the GSO said, resulting in a trade surplus of $809 million.

Vietnam's largest export earners include smartphones, mainly produced by Samsung Electronics, garments and footwear products.

According to the GSO, consumer prices in the first quarter rose 1.92% from a year earlier, while industrial output was up 6.4%.

Capital Economics expects Vietnam's recovery to continue over coming months, but warned new headwinds were emerging.

"Higher oil prices will drag on the consumer recovery," it said, noting that slower growth in the global economy will hold back exports while the growing scale of coronavirus lockdowns in China risked disrupting supply chains.

Capital Economics expects Vietnam's economy to grow 8.8% this year, higher than an official target of 6.0% to 6.5% and after 2.58% growth last year.

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