Vietnam’s Q2 GDP growth quickens alongside price pressures

HANOI (REUTERS) – Vietnam’s economy grew at a 7.72 per cent annual pace in the second quarter on the back of robust exports, government data showed on Wednesday (June 29), though the authorities noted challenges such as rising inflation for the second half of the year.

The South-east Asian country’s gross domestic product (GDP) growth compared with an expansion of 5.05 per cent in the first quarter and was the strongest growth rate for the April to June quarter since 2011, the General Statistics Office (GSO) said.

For the first half of 2022, GDP grew 6.42 per cent from a year earlier, faster than the 2.04 per cent growth in the first half of 2021.

“This is a fairly high growth compared with other countries in the region and in the world, while macroeconomic stability has been maintained,” the GSO said in a report.

Vietnam, a regional manufacturing hub, started lifting its Covid-19 restrictions late last year, allowing factories to resume full operations.

Exports in the January-June period rose 17.3 per cent from a year earlier to US$185.94 billion (S$258 billion), while industrial production increased 8.7 per cent, the GSO said.

The agency, however, warned that Vietnam’s economy will face challenges in the second half, including inflationary pressure, global political uncertainty and the lingering impacts of the pandemic.

“The Covid-19 pandemic has been contained in Vietnam, but its evolvement in the world remains complicated with the possible emergence of new virus variants,” GSO chief Nguyen Thi Huong said.

Consumer prices in Vietnam in June rose 3.37 per cent from a year earlier, led by an increase in the cost for food and energy. Transportation cost rose 21.4 per cent from a year earlier. Vietnam has a target of capping inflation at 4 per cent this year.