Vietnam’s Second Quarter Growth At Fastest Pace Since 2011

Vietnam’s GDP growth accelerated to 7.72% in the second quarter of the year, validating the Southeast Asian country’s fast rise from a rather bleak 2021. This is the most rapid growth pace in the second quarter from 2011 to 2021, according to data from the General Statistics Office.

Overall, in the first six months of 2022, Vietnam’s GDP expanded by 6.42%, higher than 2.04% and 5.74% in the same period in 2020 and 2021, respectively.

Industry and construction also jumped by 7.70% year-on-year, contributing 48.33% to the GDP growth. The service and agriculture-forestry-aquaculture respectively contributed 46.60% and 5.07%.

The index of industrial production in the first half of 2022 also surged in key sectors: Garments (23%), electric equipment manufacturing (22%), and medicines production (17.5%).

Both import and export sectors have also been seeing steady growth since January. Exports rose 17.3% to $185.94 billion, while imports saw a 15.5% growth to $185.23 billion.

The consumer price index from January to June rose 2.44%.

Foreign arrivals in the first half rose by 582%, as more than 601,000 people entered the country. The March full border reopening signaled the start of the recovery for the embattled tourism and hospitality sector. The number was significantly higher than last year’s, with only 88,000 foreign arrivals. However, compared to 8.5 million arrivals in the first half of 2019, Vietnam’s tourism industry still has a long way to go to attain and surpass pre-COVID numbers.

Furthermore, a record 76,233 newly established enterprises were documented in the first half of 2022. This presents a 13.6% year-on-year increase. The total registered capital of new firms was estimated at US$38 billion, 1.2 times higher than the average figure recorded during the 2017-2021 period. Remarkably, 40,667 enterprises re-operated in six months, up 55.6 percent.

Amidst key economic indicators showing a positive bounce from the pandemic, foreign direct investment registered capital was down 8.1%, worth only $14.03 billion in the first half of 2022. Vietnam received over $15 billion in the same period last year.

The Ministry of Investment and Planning said about $5 billion of the FDI went into new projects, down 48% compared to the same period last year. Nearly $12 billion of the investments were poured into manufacturing and real estate. Singapore was still the leading source of investment with $4.1 billion.

Investments from the European Union were down 13% in the first 12 months since the EU-Vietnam Free Trade Agreement (EVFTA) took effect in August 2020. The pandemic and the conflict in Russia and Ukraine were said to have significantly impacted EVFTA’s implementation.

It was also recently reported by a Cambodian publication that the EU had shifted orders of milled rice to Cambodia and Thailand due to high levels of agrochemicals.