Vietnam GDP (VND tn)

GDP grows at softest pace since Q1 2022 in Q4

GDP growth fell to 5.9% year on year in the fourth quarter from 13.7% in the third quarter. Q4’s reading marked the slowest expansion since Q1, driven by a less favorable base effect. Overall, Q4’s result led to 8.0% annual growth in 2022, slightly higher than our panelists’ most recent expectations of 7.5%.

Significant slowdowns occurred in the services, industry and construction sectors. Services expanded 8.1% (Q3: 19.3%), industry 3.6% (Q3: 11.1%) and construction 6.7% (Q3: 17.5%). That said, growth in the agriculture, forestry and fisheries sector accelerated to 3.9% (Q3: 3.7%).

Looking ahead, quarterly yoy growth is set to remain robust in Q1 as increased post-pandemic spending and exports remain resilient, likely boosted by increased tourism amid China’s reopening. That said, higher interest rates will likely add downward pressure to activity.

On the outlook, analysts at United Overseas Bank said:

“The strong growth seen in 2022 showed Vietnam’s resilience and ability to pull off a recovery from the damages caused by the COVID-19 pandemic, due to its diversified economic sectors in manufacturing and services. However, overall growth momentum is likely to moderate further in 2023, as policy tightening from major central banks weigh on external demand.”