4 Factors to Consider When Relocating Your Production
By Pritesh Samuel Vietnam is experiencing continued and unprecedented […]MORE
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During the first three quarters of 2018, Vietnam’s economy grew by 6.98 percent, highest since Q1-Q3 of 2011. In Q3, the economy expanded by 6.88 percent, largely driven by the growth in the industry and construction and services sector. In addition, the trade surplus in the first three quarters reached over US$5 billion. The GDP for 2018 is predicted to reach close to seven percent but may slow down to 6.5 percent in the next two years.
In Q3 of 2018, the economy expanded by 6.88 percent, compared to Q3 of 2017. GDP in Q1 and Q2 of 2018 was 7.45 percent and 6.73 percent respectively. The GDP growth between for Q1 – Q3 of 2018 reached 6.98 percent, the highest three-quarter growth since 2011.
The average CPI in the first nine months of 2018 reached 3.57 percent, which was lower than four percent, the government target.
For the period of January to September 2018, agriculture, forestry, and fishery accounted for 13.93 percent of the GDP, while industry and construction made up 33.49 percent. The services sector accounted for the majority at 42.54 percent.
Labor force aged 15 years and above in the first three quarters of 2018 reached 55.2 million while working-age labor force reached 48.5 million.
Unemployment during Q1-Q3 of 2018 was around 2.3 percent, with the rate in urban areas and rural areas reaching 3.1 percent and 1.74 percent respectively.
Agriculture, forestry, and fishery
In Q3 2018, the agriculture, forestry, and fishery industry grew by 2.2 percent, 6.52 percent, and 6.48 percent respectively. Between January and September of this year, the agriculture, forestry, and fishery witnessed the highest growth compared to 2012-2018 and was up by 3.65 percent.
Agriculture grew by 2.78 percent, while forestry and fishery grew by 5.9 percent and 6.37 percent respectively in the first nine months.
Industry and construction
The industry and construction sector grew by 8.61 percent in Q3 of 2018, with industry up by 8.48 percent and construction growing by 9.2 percent.
In the nine months of 2018, the sector grew by 8.89 percent. The industry sector was up 8.98 percent, while construction grew by 8.46 percent. Manufacturing witnessed rapid growth, growing by 12.06 percent in Q3, and 12.65 percent in the first three quarters. Mining continues its trend of negative growth.
Accounting for the majority of the economy, the services sector grew by 6.87 percent in Q3 and 6.89 percent in the first nine months.
Between January and September 2018, the wholesale and retail industry grew by 8.48 percent, the highest amongst all the industries in the services sector. Financial, banking and insurance industry grew by 7.85 percent, while accommodation and catering services grew by 5.89 percent in the same period. Real estate and transportation sectors grew by 4.04 percent and 7.55 percent respectively.
Total retail sales of consumer goods and services in the first nine months of this year was up 11.3 percent, with retail sales of goods growing by 12 percent, while accommodation and catering services growing by 8.4 percent.
International tourists to Vietnam grew by 22.9 percent in Q1-Q3 of 2018, compared to the same period last year. China, South Korea, and the EU accounted for the highest number of visitors.
Export turnover in Q3 2018 was up 15.13 percent, while in the first nine months, turnover grew by 15.4 percent to US$178.91 billion. The domestic sector grew by 17.5 percent, while the FDI sector grew by 14.6 percent in the first three quarters.
Domestic exports reached US$51.07 billion, while FDI sector exports reached US$127.84 billion.
From Q1 to Q3, there were 26 items with the export turnover of over US$1 billion, of which turnover for 5 items reached over US$10 billion.
Imports in Q3 grew by 14.76 percent, while in the in the first three quarters, it was up by 11.8 percent reaching US$173.52 billion. The domestic and FDI sector imports grew by 11.7 percent and 11.9 percent respectively to US$69.34 billion and US$104.18 billion respectively.
The domestic sector had a trade deficit of US$18.26 billion, while the FDI sector had a surplus of US$23.65 billion.
Services imports and exports
In nine months of 2018, service export turnover reached US$11.1 billion, up 14.6 percent compared to the same period in 2017. Travel services grew by 15 percent to US$7.6 billion in the first three quarters, while the transportation service sector grew by 16 percent to US$2.2 billion.
Imports grew between Q1 and Q3 grew by 8.1 percent to US$13.8 billion. The travel and transportation services sectors grew by 11.5 percent and 8.9 respectively to US$4.4 billion and US$6.5 billion respectively.
From January to September 20, 2018, FDI attracted 2,182 newly license projects, up 18.3 percent compared to the same period in 2017. Total registered capital in the same period was down three percent and reached US$ 14.12 billion.
Top FDI sources were Japan, South Korea, Singapore, Thailand, and Hong Kong, with the first two accounting for more than half of the total registered capital.
Hanoi received the highest investment, at US$4.9 billion, followed by Ba Ria-Vung Tau, Binh Duong, Dong Nai, and Ho Chi Minh City.
Major challenges facing the economy for the next year are global trade uncertainties, currency depreciation, and inflation.
According to the World Bank’s forecast, GDP growth in 2018 will reach 6.8 percent, while in 2019 and 2020 it will slow down to 6.6 percent and 6.5 percent respectively. Growth in the electronics sector, FDI, and domestic consumption will continue to contribute to economic growth.