Vietnam’s GDP growth eases in first quarter as exports slump

Vietnam’s economic growth decelerated more than expected in the first quarter as exports slumped.

Gross domestic product rose 3.32% in the three months to March compared to a year earlier, slowing from 5.92% reported in the last quarter of 2022, according to estimates released by the General Statistics Office on Wednesday. That compares with the median estimate for a 4.8% expansion in a Bloomberg survey and below all the seven forecasts.

Vietnam’s trade-reliant economy is taking a hit as tighter monetary policies globally dampen demand for goods, with the nation’s exports contracting in four of the past six months. That mirrors a trend in Asian export powerhouses, including South Korea and Taiwan, that have posted weak export figures in recent months, in part because China’s reopening has yet to generate a boost in demand. 

To limit the damage, Vietnam’s central bank this month cut a key interest rate to help lower cost of funds for banks, and in turn reduce lending rates. 

Vietnam targets 2023 exports growth of about 6%, compared to 10.5% last year, according to a government statement last month, citing deputy trade minister Do Thang Hai.

Other key details from the release:

• Exports fell 14.8% in March from a year earlier
• Consumer prices rose 3.35% in March from a year earlier; the government aims to cap inflation at 4.5% this year