Vietnam Q1 GDP growth decelerates as exports slow

02, Apr. 2019

HO CHI MINH CITY, NNA - Vietnam's economic growth in the January-March quarter lost some steam from both the previous three months and a year earlier, as export growth decelerated amid slower global demand for smartphones.

Consumer spending, which accounts for nearly 70% of the economy, supported Q1 GDP growth in light of continued improvement in labor market conditions.

The General Statistics Office of Vietnam released preliminary gross domestic product data for the first quarter of 2019 on Friday.

Key points:

―― Vietnam’s Q1 GDP grew a real 6.79 percent from a year earlier, slowing from a 7.31 percent increase in the October-December period of 2018 and a 6.82 percent rise in July-September.

―― Processing and manufacturing expanded 8.63 percent, while services rose 6.50 percent and agriculture gained 2.68 percent.

―― Exports rose 4.3 percent from a year earlier, sharply below the 24.5 percent growth in Q1 of 2018, due to a 4.3 percent drop in shipments of smartphones, mostly made by Samsung Electronics Co.

Takeaway:

―― The U.S.-China trade row may have a positive impact on Vietnam, as some manufacturers are shifting their production facilities there.

―― Vietnam’s exports to the United States jumped 26 percent in the first quarter from a year earlier, while those to China tumbled by 7.4 percent.

―― Despite the slowdown at the start of the year, Vietnam’s economy may beat the government’s 2019 growth target of 6.6 percent to 6.8 percent.