Vietnam Q2 growth remains strong

Vietnam Q2 growth remains strong

Labourers work at export garment Maxport factory in Hanoi in March this year. (Reuters photo)
Labourers work at export garment Maxport factory in Hanoi in March this year. (Reuters photo)

HANOI: Vietnam's economic growth remained strong in the second quarter, backed by robust exports and foreign investment amid the ongoing trade war between Washington and Beijing.

Vietnam has been touted as one of the largest beneficiaries of the trade war as some businesses are shifting their supply chains away from China to avoid US tariffs.

Vietnam's gross domestic product (GDP) grew 6.71% in the second quarter this year, slowing down from a revised expansion of 6.82% in the first quarter, the General Statistics Office (GSO) said on Friday.

The processing and manufacturing industry grew 9.14% during April-June from a year earlier, while the services sector rose 6.85% and the agricultural sector grew 2.19%, the GSO said in a statement.

Exports in the first half of the year rose 7.3% from a year earlier to $122.72 billion, while foreign direct investment inflows into the country grew 8% to $9.1 billion in the period.

"Although weaker global demand is likely to remain a drag, Vietnam is emerging as a clear winner of the escalating trade war as U.S. demand has shifted away from China towards alternative suppliers," Capital Economics said in a note on Friday.

Vietnam's exports to the United States rose 29% to $22.7 billion in the first five months of this year from a year earlier, according to Vietnamese government's customs data.

US President Donald Trump said on Wednesday his government was in discussion with Vietnam on trade, adding that Vietnam treated the US even worse than China.

"Comments by President Trump where he appeared to suggest that Vietnam could be next in line to face US tariffs are an obvious threat," Capital Economics said.

The GSO said Vietnam's economic growth, however, might be dragged down by a slowdown in public investment and an African swine fever outbreak that has hit farms in almost all of the country's 63 provinces.

Vietnam targets economic growth of between 6.6% and 6.8% this year.

"We expect growth to remain strong, thanks in large part to a booming export sector," Capital Economics said in the note, adding that it raised its forecast on Vietnam's GDP growth for this year to 7.0% from 6.5%.

Do you like the content of this article?

Online fundraiser for bushfire-hit koalas tops A$1m

SYDNE: An online fundraiser for koalas injured in devastating bushfires topped A$1 million (20.5 million baht) on Thursday, making it Australia's biggest campaign on the GoFundMe platform this year.


Drones enlisted to fight fungus blight in rubber heartland

The world’s biggest rubber producer and exporter is experimenting with drones as a tool to combat a leaf-attacking disease that’s spreading through its largest growing region.


Indonesia boosts bank liquidity, holds rates

JAKARTA: Indonesia's central bank said on Thursday it was lowering the amount of cash banks must hold as reserves by $1.8 billion in a bid to stimulate new lending and boost an economy that is growing at its slowest in more than two years.