Vietnam's economy expands 5.66% in the first quarter as exports boom

Vietnam economy: Vietnam's economic resilience in the first quarter is marked by GDP growth of 5.66 per cent year-on-year, propelled notably by robust exports despite global shipping disruptions. This growth, while slightly slower than the previous quarter, outpaced last year's figures, signalling a promising trajectory for the nation's economy.

Key sectors like manufacturing and construction witnessed significant expansion, recording growth rates of 6.28 per cent and 6.12 per cent respectively. Vietnam's stature as a manufacturing hub and a major exporter of electronics, smartphones, and garments played a pivotal role in driving this growth momentum.

Despite challenges in shipping routes due to conflicts in the Red Sea, Vietnam's exports surged, particularly in electronics, smartphones, and garments. Impressively, goods exports saw a 17 per cent increase, reaching $93.06 billion, resulting in a notable trade surplus of $8.08 billion.

Industrial production also witnessed a healthy uptick, registering a 5.7 per cent year-on-year increase, underscoring the underlying strength of Vietnam's manufacturing sector. Meanwhile, moderate consumer price growth of 3.97 per cent compared to the previous year and a robust 8.2 per cent rise in retail sales during the January-March period further bolstered economic indicators.

In response to concerns raised by foreign investors regarding last year's power shortages, Prime Minister Pham Minh Chinh assured measures to mitigate risks, including increased coal imports to meet electricity demands. Notably, electricity output surged by 11.4 per cent year-on-year to 65.5 billion kWh in the first quarter, reflecting proactive efforts to fortify energy infrastructure.

Government adviser Can Van Luc expressed confidence in Vietnam's ability to attain its GDP growth target of 6.0 per cent to 6.5 per cent for the year. He attributed this positive outlook to robust demand recovery, particularly in manufacturing and exports. However, Luc cautioned against external risks such as geopolitical tensions, terrorism, shipping disruptions, and climate change, stressing the importance of government action to enhance the business environment and address challenges in real estate and corporate bond markets.

Vietnam's economic performance in the first quarter highlights its resilience and potential for sustained growth, contingent upon adept management of both internal and external challenges.

With Reuter's inputs