Vietnam GDP growth accelerates in Q2 on strong industry output

Author: Pearl Bantillo

2021/06/29

SINGAPORE (ICIS)--Vietnam’s economic expansion accelerated in the second quarter on an annualized basis, backed by strong performance from the manufacturing sector.

June-quarter GDP growth at 6.61% represents a sharp improvement from the 0.39% pace recorded in the same period last year, and higher than the 4.65% rate registered in the first three months of 2021, official data showed on Tuesday.

Analysts were expecting a higher growth of 7.20% in the June quarter, Singapore-based UOB Global Economics and Markets Research said in a note on 29 June.

In the first half of 2021, GDP growth was 5.64% compared with a 1.82% growth recorded in the previous corresponding period, according to data from the Government Statistics Office (GSO) of Vietnam.

The country has managed to escape deep a pandemic-induced recession that hit most of its counterparts in southeast Asia, as well as the rest of the world, in 2020.

In the first six months of 2021, services accounted for the biggest share of the Vietnamese economy at over 41% , followed by industry and construction with about a 38% share.

Manufacturing posted an 11.42% year-on-year growth, with production of phone accessories surging 38.8% in January-June 2021, while that of automobiles increased 18.1%, official data showed.

For the whole of 2021, Vietnam’s GDP growth is forecast at 6.5%, based on the International Monetary Fund's (IMF) April World Economic Outlook (WEO).

In 2020, the economy grew 2.9%, which was “one of the highest growth rates in the world, backed by the early rebound of domestic activities and robust export performance, particularly higher-tech exports of electronics as people around the world worked from home”, the IMF had said.

But like most of southeast Asia, the country is battling a resurgence of COVID-19 infections this year although the numbers are comparatively low compared with those in other countries in the region.

On Tuesday, new infections in the country stood at 102, according to media reports.

As of 28 June, Vietnam has a total f 15,740 confirmed coronavirus cases, with 76 deaths, data from the World Health Organization (WHO) showed.

The country has administered more than 2m vaccines to its population as of 17 June.

Focus article by Pearl Bantillo

Photo: At Saigon port in Ho Chi Minh City, Vietnam on  3 May 2020. (By Hau Dinh/AP/Shutterstock)

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