Hanoi (AFP)– Supported mainly by its booming manufacturing sector, Vietnam’s growth soared to more than seven percent this year, the highest in a decade.
The country has long been one of Asia’s fastest growing economies — GDP growth topped five percent over the past five years — largely driven by the exports of cheap manufactured goods, from Nike shoes to H&M T-shirts, as well as tech products like Samsung phones and Intel computer processors.
But this year’s growth surpassed the communist government’s target of 6.7 percent, hitting 7.08 percent, according to figures released Thursday by the General Statistics Office in Hanoi.
“The processing and manufacturing sector was the bright point and the main driver for the overall growth” with a 12.98 percent increase, said GSO head Nguyen Bich Lam.
He added the economy would remain robust next year with the expected contribution of manufacturing projects such as Vinfast, a local car assembly company owned by Vietnam’s largest private conglomerate Vingroup.
Run by Vietnam’s richest man Pham Nhat Vuong, Vingroup also recently unveiled its first made-in-Vietnam mobile phones in an effort to gain a slice of the lucrative market.
However, the World Bank predicted a slowdown over the next two years if Vietnam does not protect itself from escalating global trade tensions.
“As an open economy, Vietnam needs to maintain a responsive monetary policy, exchange rate flexibility and low fiscal deficits to enhance its resilience against potential shocks,” said Sebastian Eckardt, the bank’s lead economist for Vietnam.
But relations have eased after both sides agreed to a 90-day truce earlier this month.