Vietnam Economic Update for Q1 2014

Posted by Reading Time: 3 minutes

HANOI – Vietnam’s General Statistics Office has recently released updated economic numbers for the first quarter (Q1) of 2014. The numbers released have been generally positive and reflect a growing consensus that the country is beginning to move back into a higher growth period.

GDP for the country was estimated to be at 4.96 percent. While lower than the hoped for level of five percent, this was the highest level GDP has been at for Q1 in over three years.

Professional Service_CB icons_2015RELATED: Dezan Shira & Associates’ Asia Business Model Comparison Services

Important growth numbers included:

  • Agro-forestry and fishery production grew by 2.37 percent – faster than the 2.34 percent reported in Q1 2013
  • Industry and building grew by 4.9 percent – an increase over the 4.59 percent in Q1 2013
  • The service sector saw impressive growth of 5.95 percent as compared to 4.68 percent in Q1 2013

Official development assistance (ODA) also saw an increase in 2014, up 5 percent year-on-year (Y/Y) to a total amount of US$364 million.

The two largest ODA projects consisted of a project worth US$251.7 million, which was funded by the World Bank and aimed at improving efficiency and sustainability of the road asset management and maintenance practices and US$13.56 million in non-refundable aid for the second phase of the Vietnam-Finland Innovation Partnership Program.

RELATED: Hanoi GDP on the Rise in First Quarter of 2014

However, there was a possible red flag in the numbers – FDI inflows were down 49.6 percent Y/Y with a total amount of US$3.33 billion.

RELATED: FDI Inflows Soar in Haiphong

It what seems to be a move to counter any negative sentiment arising from the low FDI numbers, the Vietnamese government stated that “the FDI sector still operated efficiently, shipping US$22.47 billion worth of crude oil abroad and occupying 62.3 percent of total export turnover. It gained a trade surplus of US$3.92 billion, including those earned from crude oil.”

Key statistics from the government’s report for Q1 include:

  • 5.2 percent increase in the Index of Industrial Production (IIP) (an increase of 4.9 percent Y/Y);
  • 7.3 percent expansion in the processing and manufacturing industries;
  • 9.2 percent expansion in electricity production and distribution;
  • 5.7 percent expansion in water supply and sewage treatment; and
  • 2.9 percent decline in the mining industry.

Agriculture industry Q1:

  • US$6.9 billion earned in the agro-forestry-fishery sector;
  • US$3.35 billion in exported agriculture products;
  • US$1.61 billion in exported aquatic products;
  • US$1.47 billion in exported forestry items;
  • US$616 million (Over 1.31 million tons) of rice exported; and
  • US$1.61 billion in exported aquatic products (an increase of 35 percent Y/Y).

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam in addition to alliances in Indonesia, Malaysia, Philippines and Thailand as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email vietnam@dezshira.com, visit www.dezshira.com, or download our brochure.

You can stay up to date with the latest business and investment trends across Vietnam by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.

 Related Reading

vb cover 1st effort

A Guide to Understanding Vietnam’s VAT
In this issue of Vietnam Briefing, we clarify the entire VAT process by taking you through an introduction as to what VAT is, who and what is liable, and how to pay it properly. We first take you through the basics of VAT in Vietnam before taking you deeper into the topic. Additionally, we provide updates on the new changes to the VAT process and explain how they will impact your business. The magazine is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore until the end of April.

Vietnam Set to Open First Online Bitcoin Trading Floor

Cheers to Vietnam: Competition on the Rise in Vietnam’s Beer Industry

McDonald’s Supersizes its Business in Vietnam

Vietnam’s High-Tech Boom

FDI Inflows Soar in Vietnam

Vietnam’s Agricultural Sector Sees Strong Growth Thanks to FDI

Leave a Reply

Your email address will not be published. Required fields are marked *