Vietnam's GDP grew by 4.14% year-on-year in the second quarter of 2023, bringing the economic expansion rate for the first six months of the year to 3.72%, according to the latest data from the General Statistics Office (GSO).

Electronics production at Katolec Vietnam in Quang Minh Industrial Park, Hanoi Photo: Pham Hung/The Hanoi Times

Looking at the period from 2011 to 2023, the 4.14% growth rate in the March-June period is only higher than the 0.34% growth recorded in the second quarter of 2020, which was a challenging period due to the Covid-19 pandemic.

In the first half (H1) of 2023, the industrial and construction sectors faced challenges in line with the global economic context. The industry's total value added rose by 0.44% compared to the same period last year. This growth rate represents the lowest increase during the period from 2011 to 2023.

The service sector has been a key driver of economic support, the GSO noted, adding that policies aimed at stimulating domestic consumption and promoting tourism have helped to sustain growth in this sector. The value added to the service sector in the first half of 2023 is estimated to increase by 6.33% year on year, exceeding the growth rates of 1.18% and 4.53% recorded in the same period in 2020 and 2021, respectively.

Meanwhile, the total trade turnover in H1 reached US$316.65 billion, down 15.2% from the same period last year. Export figures stood at over US$164.4 billion (down 12.1%), while imports amounted to US$152.2 billion (down 18.2%).

In the first half of 2023, Vietnam recorded a trade surplus of about $12.25 billion. However, within this period, Vietnam experienced a trade deficit in services amounting to $4.1 billion.

Data: GSO. Chart: Hai Yen/The Hanoi Times

In terms of the Consumer Price Index (CPI), June saw an increase of 0.27% month-on-month and 2% year-on-year. This rise was mainly influenced by higher food prices, increased expenses on electricity consumption due to the prolonged hot spell and adjustments in average retail electricity tariffs.

On average for the first six months of the year, the CPI increased by 3.29% compared to the same period last year. Notably, core inflation, which excludes volatile food and energy prices, rose by 4.74%, outpacing the average CPI increase. 

Hanoi’s GRDP stays above national average

Hanoi's Gross Regional Domestic Product (GRDP) in the first half of 2023 recorded a growth rate of 5.97% compared to the same period last year.

The service and tourism sector continued to serve as a driving force, contributing significantly to the city's overall growth, said Dau Ngoc Hung, Director of the Hanoi Statistics Department.

Speaking at a press conference on June 28, Hung said that although the GDP growth rate for the first six months of this year was lower than the 7.1% growth rate achieved in the same period last year, "it is important and remarkable considering the complex and challenging global economic conditions," he said.

Difficulties in exports and a slowdown in domestic purchasing power were among the contributing factors.

Nevertheless, the growth rate, coupled with the trend of maintaining growth momentum across quarters, is significant. In particular, the growth rate for the first quarter of 2023 was 5.95%, while the second quarter witnessed a growth rate of 5.98%.

In the first few months of the year, most of Hanoi's major and traditional import and export markets experienced a decline. However, the situation improved in the second quarter, with total import-export estimated at $13.1 billion, an increase of 6.3% over the previous quarter.

Production in several key industries was challenged by a decline in output and export orders. For the first six months of the year, the industrial production index increased by 2.3%, with the processing and manufacturing industry recording a growth rate of 1.9%.

In this context, the services sector showed significant growth in the first six months of the year, estimated at 7.54% compared to the same period last year (7.9% in the first quarter and 7.19% in the second quarter). This sector contributed 4.98 percentage points to the overall increase in GRDP.

According to the Hanoi Statistics Department, in the second half of this year, the focus will be on maintaining and boosting growth in sectors such as services, tourism, finance and banking, and freight transport, which are considered to be the city's strengths.

"Efforts will also be made to promote public investment and attract additional sources of investment capital. In addition, we will continue to focus on improving the efficiency of industrial parks, including the establishment of new factories, increasing investment in infrastructure, and attracting major projects and investors to boost production and business," Hung said.

Promoting digital transformation is also a key priority to create a conducive business environment and support enterprises, he added.

A recent survey by the city's statistics authority showed that 65.6% of processing and manufacturing enterprises reported stable and positive production and business performance in the second quarter compared to the first quarter. Looking ahead, 75.1% of enterprises expect production and business to remain stable or improve in the third quarter of 2023.