Vietnam’s Economy in Q1 2024: A Comprehensive Overview
In the first quarter of 2024, Vietnam’s economy experienced a GDP year-on-year growth rate of 5.66% and a significant uptick in Foreign Direct Investment (FDI) at 13.4% (as of March 20). This growth underscores the country’s economic resilience and attractiveness to investors.
The GDP growth rate of 5.66% in Q1 2024 marked the highest expansion for the three-month period since 2020. However, it was a decline from the previous quarter’s growth rate of 6.7%, mainly due to a drop in smartphone and automobile production. In 2023, Vietnam registered a 5.05% GDP growth rate, missing the 6.5% target.
For 2024, the IMF has forecasted that Vietnam’s economy could reach US$469.7 billion, maintaining its position as the fifth-largest economy in Southeast Asia.
Sectoral Performance: The manufacturing and services sectors led economic activity growth, surpassing last year’s expansion. The manufacturing and construction sector grew by 6.28%, while the services sector expanded by 6.12%. Industrial production, particularly in processing and manufacturing, maintained momentum.
Inflation and Retail Sales: Consumer prices grew by 3.97% in March 2024 compared to the previous year. Retail sales rose by 8.2% in the January-March period. Core inflation remained relatively stable, rising 2.81% year-on-year in Q1.
New Business Establishments: Vietnam witnessed a surge in new business establishments in Q1 2024, with 36,224 new firms registered nationwide. When including enterprises resuming operations, the number rose to 59,848.
FDI Inflows: FDI inflows into Vietnam reached over US$6.17 billion in Q1 2024, with investments spanning various sectors. Singapore emerged as the leading investor during this period.
Despite challenges, Vietnam’s economy demonstrated resilience and growth in Q1 2024, driven by strong performance in key sectors and continued FDI inflows. The positive outlook for entrepreneurship and economic growth bodes well for Vietnam’s future economic development.
Source: Asia Briefing