Vietnam Economy Shows Strength as Exports Stage Recovery

(Bloomberg) -- Vietnam’s economy fared better than expected in 2023, in signs it will improve from here as consumer demand returns, exports recover and investments surge.Most Read from BloombergThe Late-Night Email to Tim Cook That Set the Apple Watch Saga in MotionBridgewater CEO’s Past Office Romance Led to Favoritism ClaimsChinese Carmaker Overtakes Tesla as World’s Most Popular EV MakerL’Oreal Heir Francoise Bettencourt Meyers Becomes First Woman With $100 Billion FortuneXiaomi Unveils Its First EV, With Ambition to Be China’s Porsche or TeslaGross domestic product rose 5.05% from a year earlier after increasing an initial 8.02% in the previous year. The median estimate in a Bloomberg survey of economists was for 4.7% full-year growth, while the government had estimated growth at 5%.Vietnam, where value of exports is almost the same size as the country’s GDP, is recovering from a global demand downturn caused by restrictive interest rates.Anemic exports for most of the year, coupled with hiccups in the property sector, reduced what was among Asia’s fastest growing economies to a middle-of-the-pack performer this year. However, no one is writing it off in the long run. A credit-rating upgrade from Fitch Ratings this month showed Vietnam’s medium-term growth potential is intact.The economy is expected to return to 6% growth next year, and vie for the best-in-Asia growth tag by 2025, a Bloomberg survey shows.Vietnam, a member of several multilateral trade pacts, is poised to benefit from bilateral agreements this year with China, its top commerce partner, and a bump in ties with the US, its largest export market.Exports notched their first quarterly growth in five quarters, while strong retail sales in the fourth quarter showed domestic consumer demand is returning.Consumer prices rose 3.58% from a year ago in December, slower than the 3.80% gains seen by economists surveyed by Bloomberg. Credit growth in Vietnam’s banking system climbed 11.09% through Dec. 21 compared to end-2022.Story continuesThat is heartening news for Vietnam’s government, which has ramped up its push to bolster the economy. Prime Minister Pham Minh Chinh has urged banks in recent months to be more flexible in lending.He’s also nudged ministries and provincial governments to speed up disbursement of public investment as part of a goal to return GDP growth to 6% to 6.5% in 2024.--With assistance from Nguyen Kieu Giang, Nguyen Xuan Quynh, Tomoko Sato and Mai Ngoc Chau.(Updates with details throughout.)Most Read from Bloomberg BusinessweekElon Musk Made 2023 All About HimselfWhat Dermatologists Really Think About Those Anti-Aging ProductsThe Most Secretive Longevity Lab Finally Opens Its DoorsWhat the Oldest Lab Rodents Are Teaching Humans About Staying YoungHow the Elf on the Shelf Took Over Christmas©2023 Bloomberg L.P.