Vietnam’s gross domestic product increased by 13.67% year-on-year in the third quarter. This is the fastest rate in decades. The key factors were strong production, exports, and a small base effect.
The General Statistics Office (GSO) stated in its report that the industry and construction sectors grew by 12.91% year-on-year in the July-September period. The service sector grew by 18.86%, and the agricultural sector by 3.24%.
Vietnam’s GDP contracted by more than 6% in the third quarter of last year due to the pandemic.
Exports rose 17.3% year-on-year to $282.52 billion in the first nine months of this year, while industrial production increased 9.6%.
However, Vietnam is facing higher inflationary pressures. This prompted the Vietnamese central bank to raise its key interest rate last week.
Fitch Solutions said this week that the central bank will raise interest rates in the next two quarters.
“Like other central banks in Asia, the State Bank of Vietnam has been under intense pressure to implement tighter policies due to higher interest rates in the United States,” Fitch Solutions said.
The Southeast Asian country has officially set a GDP growth target of 6.0-6.5% and inflation of 4% for this year.
Capital Economics wrote in the note that a furious wind is taking place. This includes the risk that the currency will depreciate significantly and could increase pressure on import prices. However, the forecast for Vietnamese GDP growth remains at 9.0% this year and 7.5% next year.