The General Statistics Office (GSO) last week reported that after growing 5.03 per cent in Q1 2022, the Vietnamese economy bounced back to 7.72 per cent in Q2, and 13.67 per cent in Q3.

Vietnam impressing with GDP growth - illustration photo

In the first nine months of this year, it grew 8.83 per cent against the 1.42 per cent in the same period last year and only 2.12 per cent in that of 2020, representing the biggest 5-month increase in a decade.

The agro-forestry-fishery expanded 2.99 per cent on-year, while the rates of the industry and construction sector and the service sector were 9.44 and 10.57 per cent, respectively.

“The 9-month economic situation has flourished in almost all sectors. The economy’s production and business activities in Q3 have strongly grown on-year,” said GSO general director Nguyen Thi Huong.

“Many sectors have bounced back strongly, especially industrial production, making it more favourable for the economy to reach the desired growth of 7 per cent for the whole year,” she added.

In the first nine months of 2022, the added value of the industrial sector increased 9.63 per cent on-year, with manufacturing and processing expanding 10.69 per cent. Growing production has resulted in rising demand for electricity and fuel.

The Ministry of Planning and Investment reported that the economy’s production and distribution of electricity in the first nine months rose to 7.71 per cent against 5.24 per cent in the same period last year.

Electricity of Vietnam (EVN) last week reported that all of its activities increased in the first nine months of 2022. Its gross output of industry is estimated to be VND296 trillion ($12.87 billion), up 7.1 per cent, while the produced and purchased electricity volume is nearly 197.91 million kilowatt hours, up 6.81 per cent; and commercial electricity totalled nearly 181.49 million kWh, up 7.1 per cent.

Electricity for agro-forestry-fishery climbed 3.57 per cent, while the rate is 7.46 per cent for construction and industrial activities, 3.73 per cent for households, and 27 per cent for trade and hotels. EVN’s total revenue from electricity sales is estimated to stand at more than $14.87 billion, up 9.04 per cent.

Meanwhile, state-owned PetroVietnam reported that its total revenue in the first nine months is estimated to be over $25.52 billion, up 59 per cent.

The group exploited 8.15 million tonnes of crude oil, down 1 per cent on-year; 6 billion cubic metres of natural gas, up 3 per cent; 1.35 million tonnes of nitrate, up 7 per cent; 9.98 million kWh of electricity, down 18 per cent; and 5.15 million tonnes of assorted fuel, up 8 per cent.

PetroVietnam’s 9-month export turnover totalled over $2.17 billion, up 54 per cent compared to the same period last year. Its 9-month inventory also saw an on-year reduction, including liquefied petroleum gas (79 per cent), assorted fuel (48 per cent), and polypropylene (50 per cent), among others.

The GSO also reported that the economy has witnessed 112,800 enterprises newly established, up 31.9 per cent on-year; and 50,500 enterprises resuming operations, up 56.1 per cent.

Global analysts FocusEconomics said Vietnam’s industrial output will grow 14.7 per cent in 2022 and 7.2 per cent in 2023.

“Vietnam will be ASEAN’s top performer this year due to recovering private spending and investment, coupled with supportive government policies. In 2023, GDP growth should remain close to pre-pandemic levels, buttressed by stronger domestic demand,” FocusEconomics said.

“Nevertheless, a deteriorating global economy clouds the outlook. Our panellists expect GDP to expand 7.5 per cent in 2022, up 0.2 percentage points from last month’s forecast, and 6.4 per cent in 2023.”

The World Bank last week launched the East Asia and Pacific Economic Update for October, forecasting that Vietnam will grow 7.2 per cent this year and 6.7 per cent next, far higher than its April prediction of only 5.3 per cent for 2022. This was ascribed to domestic production bouncing back.

According to Carl Thayer, emeritus professor at the University of New South Wales, Vietnam’s high economic growth in the first nine months was attributed to a growing rebound in production, thanks to government policy on reining in the COVID-19 pandemic and ability to attract foreign direct investment (FDI).

“The country pursued pandemic diplomacy to acquire the vaccines necessary to inoculate the population. It instituted lockdowns where necessary. The end result was that Vietnam could drop its stricter policy and successfully counter the Omicron variant,” Thayer said.

He also noted that Vietnam is becoming a good destination for FDI whose disbursement reaching $15.4 billion during January-September 20, up 16.2 per cent on-year.

“Attracting such investment is the key metric of Vietnam’s success. Businesses in China are relocating to Vietnam. Vietnam’s control over the pandemic and political stability has enabled economic recovery to commence,” Thayer added.