Vietnam benefiting from a recovery in global consumption

Hanoi — Vietnam’s economy expanded 7.09% last year to $476.3-billion, faster than the 5.05% expansion of 2023, driven by strong exports and robust foreign investment inflows, government data showed on Monday.

GDP grew 7.55% in the fourth quarter, the fastest quarterly growth in more than two years, the general statistics office said in a report.

The Southeast Asian country, a regional manufacturing hub, has benefited from a recovery in global consumption despite being badly affected by Asia’s strongest typhoon last year.

“This is a positive result amid difficulties including natural disasters and is a good foundation for 2025 growth,” Nguyen Thi Huong, head of the GSO, said at a press conference after the report was released.

Exports in 2024 grew 14.3% from a year earlier to $405.53bn , led by shipments of electronics, smartphones, clothing and farm produce, the report said.

Imports grew 16.7% to $380.76bn in 2024, resulting in a trade surplus of $24.77bn.

The strong rebound in growth was also helped by the government increasing coal imports for power generation to avoid a repeat of the electricity shortages of previous years.

Coal imports in 2024 rose 24.8% from a year earlier to 63.8-million metric tons, while electricity output in the year rose 9.6% to 293.3-billion kilowatt hours.

Foreign investment inflows into Vietnam rose 9.4% last year to $25.35bn.

Average consumer prices in 2024 were up 3.63% while industrial production output rose 8.4%.

The benchmark stock index was up 0.13% as of midday on Monday after the release of the 2024 data.

Vietnam has set an official GDP growth target of 6.5% to 7.0% for this year. Prime Minister Pham Minh Chinh last month said it would aim for growth of 8.0%.

“Looking forward, Vietnam will actively monitor monetary policies, stabilise exchange rates, and monitor closely big trade partners to have timely policies,” Huong said.

She added that Vietnam was among countries concerned over Donald Trump’s plans for his second term as US President starting on January 20. Trump has talked of imposing new tariffs on imports into the US.

“When Trump takes office, his messages will be much clearer, and we will have preparations for the changes under his term accordingly,” Huong said.

Oxford Economics said in a note on Monday it expected Vietnam’s GDP to grow 6.5% this year, but warned that the momentum of services exports seemed to be slowing.

“Despite the positive growth data, challenges from the banking and real estate sectors remain, and credit growth has been below-trend,” Oxford Economics added.

Reuters