Vietnam economy continues recovery with 5.33% growth in Q3

Vietnam’s economy continued its recovery with GDP growth of 5.33% year-on-year in Q3/2023, accelerating from 3.28% posted in Q1 and 4.05% in Q2.

January-September growth reached 4.24%. This figure is lower than the same periods from 2011 to 2022, except for 2.19% in 2020 and 1.57% in 2021, the General Statistics Office (GSO) reported on Friday.

Between January and September, economic growth was driven by a 6.32% increase in the services sector, 3.43% in agriculture-forestry-fisheries, and 2.41% in construction-industry.

Regarding the composition of the economy, the service sector accounted for 42.72%, the construction-industry sector 37.16%, the agriculture-forestry-fisheries sector 11.51%, and net product tax minus product subsidy 8.61%.

The GSO pointed out the global economy faced various challenges in the first nine months, including decreased aggregate demand, high inflation, tightened monetary policies, all-time-high public debt, climate change and natural disasters, the Ukraine-Russia conflict, and others.

Amid global issues, Vietnam has adapted to the situation by reducing the loan interest rate, stabilizing the foreign exchange market, pushing public investment, easing e-visa policies, cutting tax rates, and aiding the real estate market, the GSO added.

Core inflation at 4.49%

Vietnam’s consumer price index (CPI), an indicator of inflation, increased 3.66% year-on-year in September and 3.12% versus December 2022. As a result, the January-September CPI grew 3.16% year-on-year. Core inflation was 4.49%.

The GSO noted that the CPI in the transportation sector rose 1.21%; housing and construction materials 1.12%; food and restaurants 0.73%; apparel-textile and footwear 0.19%; home appliances 0.12%; beverage and tobacco 0.11%; medicine and healthcare services 0.07%; culture, tourism, and entertainment 0.06%; and other goods and services 0.17%.

The only sector that saw prices decrease was telecommunication-postal services with 0.23%.

The GSO stressed that major factors affecting inflation were air fares rising 71.56% due to higher fuel prices and higher demand with the year-end holidays approaching, education costs up 7.28%, housing and construction materials increasing 6.73% due to higher input prices, food prices rising 4.85% partly due to higher rice prices in line with a global trend, and consumer electricity costs going up 3.48% after state utility EVN raised the retail price in May.