Q1 GDP growth exceeds 5% “despite complicated evolvement” of Covid

30 Mar 2022

Vietnam’s GDP rose 5.03% in Q1 this year compared to the year before, according to official data published on Tuesday, as the economy continued to reopen as Covid restrictions eased.

The rate of economic growth surpassed the 4.72% recorded in Q1 2021, and compared to 5.22% in Q4 last year.

The country’s General Statistics Office (GSO) said in a report: "Vietnam gained fairly good growth in the first quarter despite the complicated evolvement of the Covid-19 pandemic and global geopolitical uncertainty.”

In addition, the manufacturing and construction sectors grew 6.38% from the previous year, whilst services rose 4.58% and agriculture by 2.45% the Statistics Office added. Covid restrictions started to ease in Vietnam at the end of last year, permitting factories to return to full operations, reports Business Times.

"Unlike during the Delta wave, a successful vaccine roll-out has allowed the government to keep service and industrial sectors open," said Capital Economics, in reference to the recent Omicron variant outbreak.

Furthermore, exports in Q1 were up 12.9% from the same quarter last year to US$88.6 billion, whilst imports increased 15.9% to US$87.8 billion, the GSO went on to add, leading to a trade surplus of US$809 million, Reuters reports.

Consumer prices in the first quarter of the year edged up 1.92% from 2021, whilst industrial output increased 6.4%, the Statistics Office stated.

The country’s recovery is forecast to continue over the next few months, says Capital Economics, but there was a caution of fresh headwinds developing.

"Higher oil prices will drag on the consumer recovery," it said, indicating that a growth slowdown in the global economy will limit exports. In addition, further Covid lockdowns in China risk impacting supply chains.