Vietnam’s economy expanded faster than expected in the second quarter of 2019, as the country reaped the benefits of the continued trade war between China and United States which typically included foreign direct investment and export growth. GDP rose 6.71 percent year on year in the second quarter of the year, only slightly down from a revised 6.82 percent in the first quarter, according to Vietnam’s General Statistics Office (GSO). The GSO asserted that the processing-manufacturing sector, which covers merchandise exporters, was the fastest growing, posting a 9.14 percent increase. Services output rose 6.85 per cent, against 2.19 percent for agriculture.
Vietnam has been one of the biggest beneficiaries in Asia from the ongoing trade war between the world’s two largest economies, as manufacturers have moved production from China to the Southeast Asian neighbor to avoid tariffs imposed by President Donald Trump. Imports from Vietnam to the US surged nearly 40 percent year on year in the first four months of 2019, according to Financial Times calculations, while imports from China over the same period tumbled 13 percent.
The Asian Development Bank (ADB) has estimated that Vietnam will earn up to a cumulative 2 percent of GDP over three years if trade disputes escalate further. Vietnam’s gains stand in contrast to other ASEAN countries which have been hit hard by the knock-on effects of the ongoing discord, with Singapore and Malaysia suffering particularly steep falls in exports. Data released last week showed Singapore’s non-oil exports falling by the most in three years.
Other important updates:
- CPI rose 2.16% in June from a year ago, compared with a median estimate of 2.6% in a Bloomberg survey of economists.
- Exports increased 7.3% in the first six months of the year from the same period in 2018, while imports climbed 10.5%.