Vietnam's Economic Growth Predicted at 5.9%, Strengthened by Exports & Manufacturing

VIETNAM - JAKARTA. HANOI - Vietnam's export goods and industrial production saw a significant surge in July compared to the previous year, according to government data released on Monday, signaling an acceleration in the Southeast Asian nation's economic growth.

The General Statistics Office (GSO) stated in a report that exports in July are estimated to have increased by 19.1% from the previous year, reaching $35.92 billion,

The industrial production index rose by 11.2% in July from the previous year, the GSO reported.

Vietnam has been striving to boost its economic growth to meet this year's GDP growth target of 6.0%-6.5%, with the government maintaining accommodative policy settings and increasing public investment.

"We believe the ongoing uptick in the global electronics cycle will continue to support exports and industrial production for the remainder of the year," Oxford Economics noted in a statement.

The country recorded an annual GDP growth of 6.93% in the second quarter, up from 5.87% in the first quarter.

Oxford Economics predicts GDP growth will reach 5.9% this year, with the central bank's discount rate remaining at 3.0%.

Imports in July rose by 24.7% from the previous year to $33.80 billion, resulting in a trade surplus of $2.12 billion for the month, the GSO said.

A sharp increase in imports could signal future strength in industrial production if companies import more materials and equipment for their operations.

The GSO reported that consumer prices in July rose by 4.36% from the previous year. The government has stated it wants to keep inflation below 4.5% this year.

Oxford Economics stated it does not anticipate full-year inflation to move above the upper limit of the target, "despite the risk of a short-term increase from a sudden credit surge in June".