Vietnam's GDP climbs to 7.4 per cent in third quarter
Vietnam's GDP climbs to 7.4 per cent in third quarter
Vietnam's GDP growth accelerated to 7.4 per cent in the third quarter of 2024, despite the impacts of Typhoon Yagi.
According to the General Statistics Office (GSO), this was lower than the GDP growth rate posted in Q3/2022 (13.67 per cent), but higher than Q3/2021 (-6.17 per cent). The economy grew 6.8 per cent in the first nine months of 2024.
The manufacturing sector was a key driver, with growth accelerating to a 13-quarter high of 11.4 per cent in Q3 compared with 10.4 per cent in Q2 due to robust external demand. Agriculture, forestry and fishery slowed to 2.6 per cent compared with 3.6 per cent in Q2 due to the impacts of Typhoon Yagi Services growth picked up to a seven-quarter high of 7.5 per cent compared with 7.1 per cent in Q2, as the trade, tourism, and transportation sectors maintained their robust momentum.
The fastest-growing segments were transportation and storage, up 11.1 per cent in Q3 compared with 11.5 per cent in Q2, accommodation and food services (up 8.8 per cent vs. 11.1 per cent in Q2), wholesale and retail (up 8 per cent vs. 7.7 per cent in Q2) and finance (up 8.4 per cent vs. 6.1 per cent in Q2).
Maybank raises Vietnam's GDP forecast to 6.7 per cent in 2024 (vs. 6.4 per cent previously), given the robust year-to-date expansion (6.8 per cent). This builds in a slowdown in fourth-quarter GDP growth to roughly 6.5 per cent, given the impact of Typhoon Yagi and a higher base. The government’s latest GDP growth target is 6.8 per cent-7 per cent, although authorities acknowledged that achieving this target would be a ‘big challenge‘.
The economy is expected to grow by 6.4 per cent in 2025 (vs. 6.2 per cent previously). A soft landing for the US economy, coupled with resilient foreign direct investment inflows will help ensure a sustained expansion in exports, even if growth is expected to cool from the exceptional prints this year. Consumption is expected to firm, given the improving labour market and cooling inflation.
Meanwhile, the World Bank (WB) has revised up its 2024 GDP growth forecast for Vietnam to 6.1 per cent in the October edition of its East Asia and the Pacific (EAP) Economic Update, up from 5.5 per cent in the April edition. The bank anticipates Vietnam’s economic growth can reach 6.5 per cent in 2025, higher than 6 per cent forecast in its April projection.
