Vietnam’s economy slowed sharply in the first quarter of this year, with growth coming in at a much weaker-than-expected 3.3 percent, as its exporters were hit by rising costs and weaker demand, the nation’s General Statistics Office reported yesterday.
The slowdown in the January-March quarter from the 5.9 percent year-on-year growth in the final quarter of last year was nearly as severe as that during the beginning of the COVID-19 pandemic and the second lowest for the first quarter in 12 years, it said.
Vietnam has been one of the most dynamic economies in Asia in the past few years, buoyed by strong foreign investment in manufacturing of electronics and other light industries. However, efforts to slow economies to fight stubbornly high inflation are denting demand for consumer goods and other products.
Photo: AFP
The vital manufacturing and construction sectors grew just 0.4 percent from a year earlier amid a severe downturn in the property sector.
“The primary risk facing Vietnam’s growth is the worsening real-estate sector crunch that is triggering an episode of defaults,” Theng Theng Tan of Oxford Economics Ltd said in a report. “An ongoing crackdown on corruption has also deterred investors and caused disruptions in investment approvals.”
The report said total trade, covering imports and exports, fell 13 percent year-on-year.
Last year, the Vietnamese economy grew 8 percent, as the country recovered from restrictions on travel and disruptions to trade from the COVID-19 pandemic. Inflation remained relatively moderate at 2.6 percent excluding volatile food and energy costs. However, estimates for growth this year have been lowered sharply, to about half last year’s robust pace.
Separately, Malaysia revised its economic growth outlook for this year to allow for a broader forecast range, as policymakers took stock of persistent price pressures and an unpredictable global economy that could hurt the trade-reliant nation.
GDP might now quicken between 4 and 5 percent this year, Bank Negara Malaysia (BNM) said yesterday.
The new band makes room for both the government’s earlier estimate of 4.5 percent growth and the 4 percent expansion seen by economists in a Bloomberg survey.
“We anticipate that the environment moving forward will remain challenging as we continue to face risks from increasing geopolitical conflict, elevated price pressures and tighter financial conditions,” BNM Governor Nor Shamsiah Yunus said in the foreword of the bank’s 2022 Annual Report.
The forecast reaffirms Malaysia’s confidence that its economy is nowhere close to entering a recession, even as the projection is a far cry from the 8.7 percent expansion posted last year.
BNM sees price pressures averaging between 2.8 and 3.8 percent this year, affirming the government’s forecast. Headline inflation is expected to moderate throughout this year, it said.
Even so, core and headline inflation would remain elevated for several months, and the outlook is uncertain and tilted to the upside, it said.
Additional reporting by Bloomberg
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