Vietnam's growth seen strongest in eight years

Vietnam's growth seen strongest in eight years

A dog sits on West Lake in Hanoi on June 21. (EPA-EFE photo)
A dog sits on West Lake in Hanoi on June 21. (EPA-EFE photo)

HANOI: Vietnam's economy is estimated to have grown 7.08% over January-June this year, the fastest first-half growth since 2010, the General Statistics Office (GSO) said on Friday.

The economy, which expanded last year at 6.81%, the fastest rate since 2010, recorded strong growth in manufacturing, agriculture and services in the second quarter, growing 6.79% from the same period last year, GSO said.

Friday's data showed processing and manufacturing industries grew 13% in the first half, the strongest rate for the first half in seven years, boosted by the output of manufacturing firms like Samsung, which produces most of its phones in Vietnam.

The decline in mining output was reduced from previous periods.

First-half exports rose 16% from the same period last year to $113.9 billion, while imports increased 10% to $111.2 billion, leaving a $2.7-billion surplus for the period.

But the trade surplus trend seen in first four months turned into deficit over May and June, reflecting rising imports from countries with which Vietnam has free trade agreements, GSO general director Nguyen Bich Lam told a news conference on Friday.

"We tried to make a trade surplus with these countries with the free trade agreements...but statistics in the first six months showed we have a trade deficit with them at quite a high level," Mr Lam said.

Growth in the second half of the year is expected to be slower than in the first six months, as mining production is seen falling because of weather-related factors such flooding, while growth from major manufacturers in Vietnam such as South Korea's Samsung or Taiwan's Formosa was seen slowing.

Vietnam targets 2018 growth at 6.7%.

Fitch said on Thursday in a report it expects Vietnam to maintain healthy growth of 6.7% in 2018 and 2019, supported by continued foreign direct investment in export-oriented manufacturing and an expanding services sector.

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