Vietnam economy first-quarter growth hits three year low
HANOI: Vietnam’s economy grew at its slowest rate in three years during the first quarter, data showed, 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 per cent 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 per cent in the previous three months.
It also easily missed forecasts of 6.3 per cent 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 per cent,” GSO director Nguyen Bich Lam was quoted as saying by the state- controlled Saigon Times website.
Lam blamed an 11.4 per cent 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 labour.
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 per cent in the first quarter, hammering the broader electronics production sector – which accounts for almost a third of the nation’s US$ 40 billion annual exports.
Vietnam has enjoyed a reputation as one of the best performing economies in Southeast Asia in recent years, with high growth rates driven by exports of cheaply made goods, from Nike shoes to smartphones.
But problems began last year as annual expansion slipped to 6.2 per cent from 6.7 per cent in 2015.
The government also reported Wednesday that first quarter inflation edged up on the same period last year. — AFP