HANOI, Dec 29 — Vietnam’s economy grew 8.02 per cent in 2022, the fastest annual pace since 1997, backed by strong domestic retail sales and exports, but is facing headwinds from a global slowdown.
The reading is higher than an official growth target of 6.0 per cent – 6.5 per cent and last year’s growth of just 2.58 per cent, when Covid-19 lockdowns left a dent on the economy and impacted factory activity.
The high annual growth number comes despite fears of a global recession and its impact on demand for exports from Vietnam, a key manufacturer of goods like textiles, footwear and electronics for big-name international brands.
“The economic performance is worth noting amid global economic and political uncertainty and challenges,” the General Statistics Office (GSO) said in a report.
The industrial and construction sector in 2022 grew 7.78 per cent, while the services sector expanded 9.99 per cent, and the agricultural sector grew 3.36 per cent, it said.
Exports in 2022 were up 10.6 per cent to US$371.85 billion (RM1.64 trillion), while retail sales rose 19.8 per cent, the GSO said, while consumer prices in December rose 4.55 per cent from a year earlier.
Though the economy in 2022 grew at the fastest pace in decades, economists warned it is facing headwinds ahead, with weakening global demand having already impacted its shipments.
“The slowdown in global economic growth is making it more difficult for Vietnam to boost its exports and attract more foreign investment next year,” said Can Van Luc, an advisor to the government and an economist at the Bank for Investment and Development of Vietnam.
Luc said upward inflation pressure is also building following an increase in money supply towards the end of 2022, adding that ‘Vietnam has to import a lot of goods whose prices are still high, thus also pushing up pressure for higher inflation.’
Exports in December fell 14 per cent from a year earlier to US$29.66 billion (RM131 billion), while imports were down 8.1 per cent to US$29.16 billion (RM128.8 billion). A decline in imports may indicate a future contraction in industrial production as firms cut their purchases of materials and equipment for production.
GDP growth in the fourth quarter was 5.92 per cent, slowing from a growth of 13.71 per cent in the third quarter, the GSO said. Third-quarter growth was revised up from 13.67 per cent.
Foreign direct investment (FDI) into Vietnam, one of the country’s key economic drivers, rose 13.5 per cent this year to US$22.4 billion (RM98.9 billion), according to the government. But FDI pledges, which indicate future inflows, dropped 11 per cent in the year to US$27.72 billion (RM122.4 billion).
Vietnam is targeting GDP growth of 6.5 per cent and inflation at 4.5 per cent for next year.
— Reuters
