HANOI: Vietnam’s economic growth accelerated in the third quarter, led by strong manufacturing, especially in the foreign-invested sector. Gross domestic product was up an estimated 6.81% from the year-earlier quarter, beating the second quarter’s 6.47% pace and the first quarter’s 6.12%, the government’s General Statistics Office said Tuesday. Second-quarter growth was revised up from 6.44% and first-quarter growth from 6.08%.
The latest data showed that Vietnam’s economy, unlike those of peers such as Thailand, is picking up steam after a prolonged slump following 2008’s global economic crunch. Weak demand caused by nonperforming loans and rising interest rates left the country’s economy largely dependent on foreign investment for growth. In 2012, GDP growth dropped to 5.25%—almost a recession in a country previously accustomed to annual growth rates of 7% or more.
This year, though, lower inflation—led by drops in fuel and food prices—has allowed banks in Vietnam top boost their lending, supporting economic growth. Vietnam’s consumer-price index in September was little changed from a year earlier and fell 0.21% from last month, government data released last week showed.
Banks’ total outstanding loans at the end of August were up 10.23% from the end of 2014, the State Bank of Vietnam said earlier this month. It said credit growth may reach 16.5% this year, exceeding its initial target of 13% to 15%.
Earlier this month, the Asian Development Bank raised its forecast of economic growth for Vietnam this year to 6.5% from 6.1%. The government’s initial target was 6.2%.
The manufacturing and construction sector grew 9.57% in the January-September period compared with the year-earlier period, while the services sector expanded 6.17%, and the agricultural sector 2.08%, the GSO said.
Foreign direct investment, which has helped boost Vietnam’s exports, continues to support this growth. The Ministry of Planning and Investment said Monday the disbursement of foreign direct investment in the first nine months of this year is expected to total $9.65 billion, up 8.4% from a year earlier.
Exports by foreign-invested companies, such as Samsung Electronics, were up 15.8% in the period compared with a year earlier, and now account for around 70% of Vietnam’s total export revenue, according to the ministry.
Exports in the nine-month period were i[ 9.6% from a year earlier, to $120.7 billion, the government’s statistics office said, while imports were up 15.9% at $124.6 billion, it said. The Asian Development Bank on Tuesday forecast continued modest inflation in Vietnam this year and next—2% and 4%, respectively—leaving room for lower interest rates.
