Vietnam GDP growth quickens on investment, manufacturing

Customers walking along fabric rolls which are displayed for sale at a market in Hanoi, Vietnam on Dec 24, 2015. PHOTO: REUTERS
Customers walking along fabric rolls which are displayed for sale at a market in Hanoi, Vietnam on Dec 24, 2015. PHOTO: REUTERS

HO CHI MINH (BLOOMBERG) - Vietnam's economic growth quickened in the fourth quarter helped by rising industrial output and record- high foreign investment.

Gross domestic product rose 7.01 per cent in the fourth quarter from a year earlier, quickening from a revised 6.87 percent gain in the three months through September, according to data released by the General Statistics Office in Hanoi on Saturday. In 2015, the economy grew 6.68 per cent, beating the government's 6.2 per cent target. That compares with a median estimate of 6.6 per cent in a Bloomberg survey.

Vietnam's economic growth "has gained momentum gradually and is now being supported both by exports of foreign-invested enterprises and domestic demand," Jonathan Dunn, the International Monetary Fund's resident representative in Vietnam said in a statement released Dec. 5 in Hanoi.

The State Bank of Vietnam weakened the dong three times this year to spur exports after China depreciated the yuan, dragging exchange rates lower across Asia. Vietnam's economic growth in 2015 may be the fastest among six major Southeast Asian countries tracked by the Asian Development Bank, the ADB said in a recent report.

Exports rose 8.1 per cent in the 12 months through December from a year earlier to US$162.4 billion, with 71 percent coming from foreign companies

Imports climbed 12 per cent from a year earlier for the same period.

Retail sales gained 9.5 per cent in Jan.-Dec. from year earlier while industrial production jumped 9.8 per cent in same period from year earlier. Manufacturing rose 10.6 per cent in same period from year earlier.

The government will focus on steps to bolster businesses, particularly the private sector, as part of its attempt to increase the country's productivity in 2016-2020, Prime Minister Nguyen Tan Dung said Dec. 5. Vietnam's legislature last month passed a 2016 GDP target of 6.7 per cent.

The economy will face challenges in 2016 include falling global oil prices and rising pressure on the dong, said Nguyen Bich Lam, head of General Statistics Office, speaking at at a briefing in Hanoi on Saturday.