Vietnam Economic Update for Q1 2014

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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.

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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.

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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.

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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).

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