Vietnam’s economy grew at a slower pace than economists estimated in the first quarter as industrial output eased and Samsung Electronics Co. cut production of smartphones.
Gross domestic product rose 5.1 percent from a year earlier, the General Statistics Office said in Hanoi Wednesday. That was lower than all eight forecasts from economists in a Bloomberg survey and below the median estimate of 6.25 percent GDP expanded 6.68 percent in the fourth quarter of 2016, according to previously reported data.
Samsung’s output in Vietnam fell 38 percent in the first quarter from a year ago, dragging down electronics production
Vietnam outperformed most of its Southeast Asian peers last year as export growth remained resilient. The economy has become a manufacturing hub for companies such as Samsung, which is Vietnam’s biggest exporter, accounting for about 20 percent of the nation’s shipments. Samsung took the dramatic step in October to end production of its Galaxy Note 7 smartphone, a decision that businesses said at the time would hurt the economy.
Global trade risks are also mounting, with Vietnam among the countries in Asia most vulnerable to a rise in protectionism in the US. The government is increasing spending on infrastructure to retain its role as a top investment destination in Southeast Asia as others like the Philippines catches up. The World Bank forecasts Vietnam’s economy will expand more than 6 percent this year and next, among the fastest in the world.
“The upshot is that we expect GDP growth in Vietnam to accelerate in 2017,” Gareth Leather, a senior Asia economist at Capital Economics Ltd. in London, said in a report. “There are some factors that should help to support growth this year,” he said, citing a recovery in agricultural output, loose monetary conditions and a strong export sector.
Manufacturing gained 8.3 percent in the first quarter from a year earlier Exports rose 12.8 percent in the first quarter, imports gained 22.4 percent Exports of telephones and parts plunged 24.4 percent in March from a year earlier, the second month of contraction.