Decade low GDP growth

The negative growth in Q3 has stunted Vietnam’s gross domestic product (GDP) growth in 2021 to 2.58%, lower than the 2.91% level in 2020 and has become the lowest GDP growth over the past decade.

At a press briefing held to announce the country’s socioeconomic performance in 2021, the General Statistics Office (GSO) reported that the country’s GDP grew 5.22% in Q4, higher than that of the same period in 2020. However, the steep fall of 6.17% in the previous quarter resulted in low GDP growth for the whole year.

The GSO attributed the result to the impact of the Covid-19 pandemic on all aspects of the economy, especially in the third quarter, when many localities imposed strict mobility restrictions. However, the GSO considered this a success, as the country has been concurrently fighting the pandemic and maintaining production and business activities.

The agro-forestry-fishery sector grew 2.9% year-on-year and contributed nearly 14% to the overall economic growth. The industry-construction sector expanded 4.05% and the service sector edged up 1.22%. The two sectors contributed 63.8% and 22.2%, respectively. The Covid-19 pandemic, which has been raging since late April, has significantly hit trade activities and services. The decline of some key services has slowed the growth of the service sector and the economic growth as a whole.

The wholesale and retail sector reported a fall of 0.21%, the transport sector, 5.02%, and lodging and catering services, 20.81%. On the other hand, the healthcare and community support sector registered the highest growth among services, with a rise of 49.75%. The banking, finance and insurance sector also posted strong growth, at 9.42%,

The processing and manufacturing remained a driving force for the economy, with a growth of 6.37%.

The consumer price index increased 1.84% over 2020, the lowest since 2016. Core inflation, which excludes the prices of fresh food, energy, and statecontrolled healthcare and education services, inched up 0.81%.