Viet Nam posted year-on-year GDP growth of 7.38 per cent in the first quarter of 2018, the best first-quarter performance in the last ten years, backed by growth in manufacturing and agriculture.

Director of the General Statistics Office (GSO) Nguyen Bich Lam announced the information at a press conference in Ha Noi on Thursday.

The agro-forestry-fishery sector increased by 4.05 per cent, contributing 0.46 percentage points to the 7.38 per cent GDP growth. The industrial and construction sector posted a 9.7 per cent growth rate, contributing 3.39 percentage points while the service industry climbed 6.7 per cent, contributing 2.75 percentage points.

“While agriculture and wholesale and retail trade saw steady rises year-on-year, manufacturing remained the pillar of growth, expanding more than 13 per cent, the fastest pace in the last seven years, thanks to robust production of electronics, computers and steel,” Lam said.

He also attributed the high GDP growth to momentum from the third and fourth quarters of last year, which were 7.46 per cent and 7.65 per cent, respectively.

Lam added that the positive macroeconomic data reflects the Government’s effective actions, as well as efforts of ministries and local authorities.

According to the latest Nikkei report, Viet Nam’s purchasing managers index (PMI) edged up slightly from 53.4 in January to 53.5 in February. A reading higher than 50 indicates growth in manufacturing activity.

January-March average annual inflation was 2.82 per cent, the GSO said. Inflation this year could surpass the 4 per cent limit set by the Government if prices of oil, some food products and pork spike later this year, Lam said.

Viet Nam aims for growth of 6.7 per cent this year, which Lam said is still a challenge despite strong growth in the first quarter as the exports-driven Vietnamese economy becomes increasingly exposed to international market conditions.

"The 6.7 per cent target is not simple, it’s still a challenge that requires comprehensive efforts from all authorities and enterprises," Lam said.

Lam said the socio-economic situation in the first three months of 2018 took place in the context that the world economy was maintaining steady growth but with many unpredictable factors.

While major economies such as the US, Japan, and the European Union were showing signs of improvement, China is losing momentum. Global trade recovery had been recovering but still faces many challenges due to rising protectionism in large countries, all factors affecting the Vietnamese economy and other regional countries.

On the business front, in Q1, the registration of nearly 26,800 new enterprises with total capital of nearly VND278.5 trillion marked a year-on-year increase of 1.2 per cent in number and 2.7 per cent in capital. In addition, nearly 8,450 businesses resumed operations, a year-on-year decrease of 8.9 per cent. — VNS