Vietnam’s economy grew at a slower pace than economists estimated in the first quarter as industrial output eased and Samsung Electronics Co cut production of smartphones.
GDP rose 5.1 percent from a year earlier, the Vietnamese General Statistics Office said in Hanoi yesterday. That was lower than all eight forecasts from economists in a Bloomberg survey and below the median estimate of 6.25 percent.
GDP expanded 6.68 percent in the final quarter of last year, according to previously reported data.
Photo: Reuters
Samsung’s output in Vietnam fell 38 percent in the first quarter from the previous year, dragging down electronics production.
Vietnam outperformed most of its Southeast Asian peers last year, as export growth remained resilient. The economy has become a manufacturing hub for companies such as Samsung, which is Vietnam’s biggest exporter, accounting for about 20 percent of the nation’s shipments. Samsung took the dramatic step in October last year to end production of its Galaxy Note 7 smartphone, a decision that businesses said at the time would hurt the economy.
Global trade risks are also mounting, with Vietnam among the nations in Asia most vulnerable to a rise in protectionism in the US.
The government is increasing spending on infrastructure to retain its role as a top investment destination in Southeast Asia as others, such as the Philippines, catch up.
The World Bank forecasts Vietnam’s economy would rise more than 6 percent this year and next, among the fastest in the world.
“The upshot is that we expect GDP growth in Vietnam to accelerate in 2017,” Gareth Leather, a senior Asia economist at Capital Economics Ltd in London, said in a report.
“There are some factors that should help to support growth this year,” he said, citing a recovery in agricultural output, loose monetary conditions and a strong export sector.
Manufacturing gained 8.3 percent in the first quarter from the same period last year. Exports rose 12.8 percent in the first quarter, while imports gained 22.4 percent. Exports of telephones and parts fell 24.4 percent year-on-year last month, the second month of contraction.
Retail sales rose 9.2 percent in the quarter.
Consumer prices rose 4.7 percent last month from a year earlier, compared with a median estimate of 4.8 percent in a Bloomberg survey of five economists.
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