Vietnam’s economy in the first half of 2023 witnessed a slowdown in GDP growth as reported by the Vietnam General Statistics Office (GSO). Compared to the same period last year, GDP growth was 3.72%, reaching the second lowest point in the 2011-2023 period. This reflected the impact of weakening growth in industrial production and exports.
Vietnam recorded a trade surplus of US$12.25 billion in the first half of this year. Total import-export reached US$316.65 billion, a 15.2% decrease compared to last year with exports and imports declining 12.1% and 18.2% respectively. The six-month export value stood at US$164.45 billion, with 73.6% contributed by the foreign-invested sector. The United States remained the largest export market for Vietnam with expenditure of US$44.2 billion on Vietnamese goods, while China maintained its position as the largest import market, with commodities worth US$50.1billion sold to Vietnam in the last six months.
The index of industrial production (IIP) in the first half of 2023 grew by only 0.44% compared to the same period last year as key industries face major difficulties due to decreasing orders, falling demand, and rising input costs. An estimated 217,800 job layoffs and multiple cases of reduced working hours, primarily in sectors affected by the order shortfall such as textile, garment, and spare part manufacturing, were witnessed since the fourth quarter of 2022.
However, there were also notable bright spots in the Vietnamese economy for the first half of the year. The services sector played a key role in GDP growth, contributing 67.84% to the overall growth with a 6.11% increase. The agriculture sector, while representing less than 10% of GDP growth, showed promise through increased export volume and market diversification. Vegetable and fruit exports alone rose by 63% year-on-year, generating US$2.8 billion in revenue while rice exports also grew by 22.2% in volume and 34.7% in value compared to the same period last year.
Vietnam continues to prove itself as an attractive destination for foreign investment. During the first half of the year, Vietnam experienced a surge in newly registered projects, with 1,293 projects and a combined capital of US$6.49 billion, representing a growth of 71.9% in project numbers and 31.3% in capital compared to the same period last year.
Despite the modest economic growth in the first six months, the Government of Vietnam remains resolute in its target of achieving 6.5% GDP growth for 2023. The Prime Minister emphasized the determination, requesting authorities at all levels that all efforts must be made to reach the set growth target for the entire year. The government has set a prime priority on boosting growth, with brand new solutions ordered to fuel enterprise performance. FDI is also forecasted to grow in the second half as many large-scale firms from Japan, Korea, Taiwan, and China are planning to invest in Vietnam with additional capital pouring into underway projects.
