Vietnam's first-quarter GDP growth hits decade low

However, given the global economic downturn due to the impacts of the COVID-19 pandemic, the increase is pretty good as compared with the region and the world, according to the official.

During the reviewed period, the macro economy remained stable and the processing and manufacturing sector, despite its low growth, continued to be the engine of the national economy, Lam added.

The official elaborated that the agro-forestry-fishery sector expanded 0.08 percent, contributing 0.2 percent to the GDP growth, while industry and construction picked up 5.15 percent, contributing 58.4 percent, and services went up 3.27 percent with a contribution of 41.4 percent.

Between January and March, final consumption expenditure rose 3.07 percent year-on-year, asset accumulation up 2.2 percent, the lowest since 2013, exports up 1.59 percent and imports up 1.05 percent.

The modest increases reflected the stagnant supply of goods and raw materials in the first three months due to strong impacts of the epidemic, Lam said.

He pointed to difficulties facing the agro-forestry-fishery sector, caused by the African swine fever, drought and saltwater intrusion in the Mekong Delta, along with the risk of an outbreak of avian influenza besides the complex developments of COVID-19. Agriculture alone recorded a minus 1.17 percent, and fisheries were up 2.79 percent, lower than the increases of 4.96 percent and 5.42 percent posted in the same periods in 2018 and 2019, respectively.

In the industry and construction sphere, industry grew 5.28 percent, a far cry from the 9 percent growth recorded in the same period last year and 10.45 percent in the first three months of 2018.

Lam explained that the pandemic has hampered the import of materials serving industrial production, especially processing and manufacturing.

The severe impacts of the disease were also felt in trade, services, tourism, and import-export.

Retails and wholesale grew by only 5.69 percent compared to 7.91 percent in the same period last year. Accommodation and catering service, transportation and warehouse, and administrative and support services all saw minus growth.

However, some sectors have maintained their performance, such as finance, banking and insurance (up 7.19 percent), health care and social activities (up 9.97 percent), and information and communication (up 7.78 percent).

The Nikkei Vietnam Manufacturing Purchasing Managers’ Index (PMI) also dropped to 49 points in February, a sign of declining business conditions and consumption demand, Lam said, noting that this is the first decrease in four years.

He stressed that in the present circumstances, the Prime Minister and Government have given the top priority to fighting the pandemic and protecting people’s health even at the expense of economic benefits.