The year began on a positive note for Vietnam. Economic activity was strong in Q1, setting the stage for acceleration in annual GDP growth. The economy is benefitting from a recovery in domestic demand and foreign direct investment (FDI) inflows that continue to support investments and exports. Besides, low global oil prices have pushed consumer price pressures lower. With inflation below the central bank’s target, monetary policy is likely to remain accommodative. The economy will also benefit from reforms aimed at improving the health and efficiency of banks and state-owned enterprises. Policymakers are also trying to deepen economic engagement with key trading partners, a move that is likely to reap dividends in the medium to long term.
Vietnam’s economy has been quick off the blocks in 2015, growing 6.0% year-over-year in Q1 2015.
This is the fastest pace of growth for the first quarter in the last five years. Usually GDP growth in Vietnam accelerates through the year. Consequently, strong growth in Q1 2015 augurs well for the coming quarters. In Q1, industry and construction had the largest impact on GDP growth, contributing 2.8 percentage points. Services and agriculture contributed 2.4 and 0.3 percentage points, respectively.³