HANOI: Vietnam’s growth soared to more than 7 per cent this year, its highest in a decade, helped by a surge in its manufacturing sector.
The country has long been one of Asia’s fastest growing economies – GDP growth topped 5 per cent over the past five years – largely driven by the exports of cheap manufactured goods, from Nike shoes to H&M T-shirts, as well as tech products like Samsung phones and Intel computer processors.
But this year’s growth surpassed the communist government’s target of 6.7 per cent, hitting 7.08 per cent, according to figures released Thursday (Dec 27) by the General Statistics Office in Hanoi.
“The processing and manufacturing sector was the bright point and the main driver for the overall growth” with a 12.98 per cent increase, said GSO head Nguyen Bich Lam.
He added the economy would remain robust next year with the expected contribution of manufacturing projects such as Vinfast, a local car assembly company owned by Vietnam’s largest private conglomerate Vingroup.
Run by Vietnam’s richest man Pham Nhat Vuong, Vingroup also recently unveiled its first made-in-Vietnam mobile phones in an effort to gain a slice of the lucrative market.
However, the World Bank predicted a slowdown over the next two years if Vietnam does not protect itself from escalating global trade tensions.
“As an open economy, Vietnam needs to maintain a responsive monetary policy, exchange rate flexibility and low fiscal deficits to enhance its resilience against potential shocks,” said Sebastian Eckardt, the bank’s lead economist for Vietnam.
A bruising trade war between the US and China has caused reverberations around the region, as Washington and Beijing have slapped tit-for-tat tariffs on more than $300 billion worth of goods.
But relations have eased after both sides agreed to a 90-day truce earlier this month.