Vietnam’s Q3 GDP rose 13.67% compared to a year earlier, the fastest increase in decades, bolstered by strong manufacturing and exports as well as a low base effect, as per government data published on Thursday.

Vietnam’s industrial and construction sector grew 12.91% in the third quarter compared to the year before, according to the General Statistics Office (GSO). In addition, the country’s services sector rose 18.86%, whilst the agricultural sector grew 3.24%.

In Q3 last year, Vietnam’s GDP had contracted over 6% due to the pandemic, Reuters reports, yet there has since been a rebound.

During the first nine months of the year, exports increased 17.3% from the year before to $282.52 billion, whilst industrial production rose 9.6%, according to the General Statistics Office.

"Business activities in the third quarter saw strong growth, especially compared with the same period last year when several parts of the country were under strict lockdown due to the pandemic," the GSO stated.

However, Vietnam is also facing inflationary pressures, leading the central bank to hike its policy rates last week, "in line with the global trend,” said Bank for Investment and Development of Vietnam economist, Can Van Luc.

Earlier this week, Fitch Solutions said it forecast the central bank to announce further rate hikes in the coming two quarters.

"Like most other central banks in Asia, the (State Bank of Vietnam) has come under significant pressure to tighten policy due to rising interest rates in the United States," Fitch Solutions stated.

"Vietnam's current environment of low inflation is unlikely to last for much longer."

Consumer prices rose 4.01% this month from the end of last year, the GSO added.

Vietnam has set official GDP growth targets of 6.0%-6.5% and inflation at 4% in 2022.