Vietnam economy Q1 growth hits 3-year low

HANOI: Vietnam’s economy grew at its slowest rate in three years during the first quarter, data showed yesterday, with Samsung’s decision to slash output in response to its Note 7 fiasco dragging on the key electronics sector. The expansion of 5.1 percent on-year in January-March this year was the worst since 2014, according to General Statistics Office figures, and was well off the 6.7 percent in the previous three months. It also easily missed forecasts of 6.3 percent in a Bloomberg News survey.

State-run media in the communist country said the lacklustre growth was a sign of an “economic slowdown”. “If there is no major breakthrough, it will be very difficult to reach the year-end target of 6.7 percent,” GSO director Nguyen Bich Lam was quoted as saying by the state-controlled Saigon Times website. Lam blamed an 11.4 percent production drop in the mining industry-Vietnam has tin and coal mines-and tepid growth in other industrial sectors. Electronics manufacturers also produced fewer of the goods they pump out to global consumers from factories staffed by cheap Vietnamese labor. South Korean giant Samsung, which has invested heavily in Vietnam, was forced to scale back on production of smartphones in the country, Bloomberg News said, as its pulled the Galaxy Note 7 from shelves owing to exploding batteries and a chaotic recall that saw replacements also catching fire. The electronics giant’s output in Vietnam fell 38 percent in the first quarter, hammering the broader electronics production sector-which accounts for almost a third of the nation’s $40 billion annual exports.