Overview of Vietnam’s Q1 2024 Economic Growth
Vietnam’s economy experienced notable GDP growth in the first quarter of 2024, expanding by 5.66% year-on-year, according to the General Statistics Office (GSO). This marked the highest growth rate for the January-March period since 2020. However, it was a decline from the 6.7% growth in the previous quarter due to reduced smartphone and automobile production. Despite the setback, the International Monetary Fund (IMF) forecasts that Vietnam’s economy could reach US$469.7 billion in 2024, maintaining its position as the fifth-largest economy in Southeast Asia. These insights are crucial for anyone conducting Market Research Vietnam, as they highlight the dynamic economic landscape.
Key Economic Sectors
The manufacturing and services sectors were the primary drivers of Vietnam’s economic growth in Q1 2024. The manufacturing and construction sector grew by 6.28%, while the services sector expanded by 6.12%. Industrial production added value rose by 6.18% year-on-year, contributing significantly to the overall economic growth. Notably, the processing and manufacturing sectors grew by 6.98%, while electricity production and distribution increased by 11.97%.
However, the mining industry faced a contraction of 5.84%, with decreases in coal and crude oil exploitation. Despite these challenges, final consumption and asset accumulation saw increases of 4.93% and 4.69%, respectively, contributing positively to the economy.
Vietnam’s Consumer Prices and Trade Performance
Consumer prices in Vietnam grew by 3.97% in March 2024 compared to the previous year, while retail sales rose by 8.2% in the January-March period. Core inflation remained stable at 2.81% year-on-year. The cost of essential services like water, electricity, education, and health services saw significant increases.
Vietnam’s export of goods and services experienced a remarkable growth of 18%, with imports rising by 17.08%, resulting in a trade surplus of 19.16%. This positive trade performance highlights the robust nature of the country’s economy, essential for market research in Vietnam.
New Business Establishments and FDI in the Market
Vietnam witnessed a surge in new business establishments, with 36,224 new firms registered in Q1 2024. Including enterprises resuming operations, the number rose to 59,848. March alone saw 17,136 new businesses, outpacing the 10,531 firms that temporarily exited the market.
Foreign Direct Investment (FDI) also saw a significant uptick, with over US$6.17 billion in newly registered, additional, and contributed capital in Q1 2024, marking a 13.4% increase year-on-year. Vietnam granted investment certificates to 644 new projects, totaling US$4.77 billion, a 57.9% increase in value. Capital injection into existing projects and stake purchase activities also saw substantial increases.
Sector-Specific FDI Insights
The manufacturing and processing industry remained the top recipient of FDI, attracting US$3.93 billion. The real estate sector followed with US$1.58 billion, showing a 2.1 times increase compared to the previous year. Other notable sectors included wholesale and retail, and science and technology, which received US$224.8 million and US$190.2 million, respectively.
Leading Investors and Regions
Singapore emerged as the leading foreign investor in Vietnam during Q1 2024, with a total registered capital of over US$2.55 billion, marking a 51.3% increase. Hong Kong followed with US$1.05 billion, reflecting a 2.3 times growth. Hanoi was the top FDI destination within Vietnam, receiving US$970.8 million, a remarkable 6.1 times increase, followed by Bac Ninh province with US$745.2 million.
Conclusion
Vietnam’s Q1 2024 economic performance showcases a blend of robust growth and challenges. With significant contributions from manufacturing, services, and a positive trade balance, the country’s economic resilience is evident. For stakeholders engaged in market research Vietnam, these insights underscore the dynamic nature of Vietnam economic growth, offering a promising outlook for future investments and economic activities.
