Vietnam’s economy grew at a slower pace in the first quarter as weakening global demand for smartphones weighed on exports, government data showed yesterday.
Gross domestic product grew 6.79% in the January-March period, slower than 7.31% in the December quarter, and compared to 7.45% in the first quarter last year, the General Statistics Office (GSO) said.
Processing and manufacturing grew 8.63%, while services rose 6.50% and agriculture gained 2.68%, the GSO said.
“The economy is still facing numerous difficulties and new challenges,” the GSO said in a statement.
Exports of smartphones, the country’s biggest export earner and mostly produced by South Korea’s Samsung Electronics, fell 4.3% from a year earlier to $12.05bn in the quarter, the GSO said.
“The global smartphone market has been witnessing a decline over the past few years, and like most other markets, Vietnam has been inevitably affected by this slowdown,” said Kim Yang-jae, an analyst at KTB Investment & Securities.
Samsung, which invested more than $17.3bn in eight factories and a research and development centre in Vietnam, is the largest single foreign investor and accounts for more than one-fifth of Vietnam’s total exports. Overall, Vietnam’s exports in the first quarter rose 4.7% from a year earlier to $58.51bn, much slower than an annual expansion of 24.5% in the same period last year.
Capital Economics gave a subdued growth outlook, pointing to weaker exports and tighter fiscal policy in the form of slower spending and higher taxes to tackle a large public debt and budget deficit.
“Weaker global demand and a downturn in the technology sector have contributed to slowdown in export growth over the past few months, and are likely to weigh on exports over the next couple of quarters,” the agency said, forecasting 6% growth for this year and 2020.
Vietnam’s GDP grew by 7.08% last year, the quickest pace since 2011 and faster than an expansion of 6.81% in 2017.
The government has targeted economic growth of between 6.6% and 6.8% this year.
While manufacturing slowed this quarter compared to 8.85% growth in the December period, analysts say Vietnam could benefit if the US-China trade war drags on.
Vietnam and Thailand are emerging as preferred destinations for global companies seeking to shift production and supply chains out of China.
Vietnam’s consumer price index in March rose 2.7% from a year earlier, led by an increase in the cost of food and education services, the GSO said.
Published On : 29-03-2019
Source : Gulf Times
