The First Quarter already showed certain weaknesses as the Vietnamese economy did not grow fast enough as projected. The major issue is a decline in exports. The Bloomberg survey predicted a GDP growth of 6.25%, but the first quarter of 2017 has shown only a growth of 5.1% which is way lower than projected. Last year, Vietnam’s GDP grew as estimated by full 6.21%, and its slow growth in 2017 is the slowest in the last three years which means that Vietnam is seriously falling back hitting a three-year low.
Economic Sectors of Vietnam
Even if exports were predicted to rise by 13.3%, they were yet at 12.8% in March this year. Therefore, imports grew by 22.4%, which is good given that estimates predicted an additional 0.4% growth in imports. Still, it caused a large trade deficit which comes around $1.1 billion which is still an improvement if compared to the February 2017 deficit of $2 billion. Industrial manufacturing also did not live up to expectations, growing at a 5.5% rate in the last year which gives way to new inflation waves and fluctuations in the stock market.
Q1 analysis also revealed a slight price growth, whereby the Consumer Index marks a 4.65% rise for March, despite the fact that retail sales grew by 0.5% on a year on year basis.
Things looked very good and shiny for Vietnam in 2016 when it excelled in economic figures beating even projected estimates for 2016. It was perceived as one of the fastest growing economies in the world, and yet it came to a slowdown in 2017. The extension of many international companies to Vietnam like Samsung Electronics certainly indicated a more rapid growth in 2017, yet the economy showed once again that predictions are not 100% reliable. Still, Vietnam has the opportunity to perform better in the second quarter this year.