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Vietnam recorded 8% economic growth, but upward trend may not continue

Representative image. AFP

Hanoi: Vietnam’s economy grew 8 percent in 2022, driven by strong exports and retail sales, authorities said Thursday.

Growth in the communist nation has stuttered to around 3% for two straight years due to the pandemic.

Before that, Vietnam was a success story among Asian economies, posting 7% growth in 2019.

This year the economy has grown by around 8%, beating the government’s target of 6-6.5%, the official statistics office said.

“The economy has recovered” from the COVID-19 pandemic, he added.

The upward trend may not continue

Growth slowed in the last quarter of the year as economies around the world were hammered by war in Ukraine and massive inflation.

Fourth-quarter export turnover fell 6.1 percent year-on-year due to a lack of overseas orders, the statistics bureau said.

Earlier this month, the Asian Development Bank predicted 7.5% growth for Vietnam’s economy for 2022, although it warned of weakening global demand for its exports.

The lender said it expects Vietnam’s economy to grow 6.3% in 2023.

The recent cost-of-living crisis in Europe and the United States – main markets for Vietnamese products – has seen the purchasing power of Western buyers plunge.

Many factories in Vietnam produce goods for foreign parent companies that supply products to brands around the world. In recent months, these parent companies have seen brand orders canceled due to falling demand.

Factories had to either lay off staff to stay afloat or shut down altogether.

More than 5 lakh workers in the manufacturing industry, which supplies the European and American market, have had their working hours reduced, according to a VnExpress report.

Around 40,000 people have been laid off in the past four months alone, according to the Vietnam General Confederation of Labour.

With contributions from AFP

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