Vietnam's economy unexpectedly expands in Q2 amid Covid-19 outbreak

HANOI (BLOOMBERG) – Vietnam’s economy unexpectedly grew in the second quarter, though at the slowest pace in at least a decade, as exports slumped because of the coronavirus pandemic.

Gross domestic product rose 0.36 per cent from a year earlier, compared with a revised 3.68 per cent in the first quarter, the General Statistics Office said on Monday (June 29). The median estimate in a Bloomberg survey of economists was for GDP to shrink 0.9 per cent.

Vietnam’s export-reliant economy is taking a knock as the virus disrupts global supply chains and hurts demand, but is still likely to be one of the better performers in South-east Asia this year. Prime Minister Nguyen Xuan Phuc said last month the economy could sustain growth of 4 per cent-5 per cent this year as the government looks to attract more foreign investment from businesses adjusting supply chains.

With GDP expansion in the first half of 2020 at 1.81 per cent, reaching the government’s 6.8 per cent growth target for the full year is “impossible,” Duong Manh Hung, head of the statistics office’s GDP department, said during a briefing. The statistics office proposes a target revision to the prime minister, Mr Hung said

Exports fell 2 per cent in June compared to a year earlier, while imports climbed 5.3 per cent

Consumer prices rose 3.17 per cent in June from a year earlier, up from 2.4 per cent in May. The government aims to cap average inflation at 4 per cent this year

Vietnam posted a trade surplus of US$500 million (S$696 million) in June, compared with a US$900 million deficit the previous month.

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