(Bloomberg) -- Vietnam’s economic growth unexpectedly accelerated last quarter, boosted by manufacturing and exports before a super typhoon in September caused widespread damage and halted farm and factory output.
Gross domestic product rose 7.4% in the three months ended September from a year earlier, the General Statistics Office said Sunday. That compares to a 6.1% median estimate in a Bloomberg survey and a revised 7.09% expansion for the second quarter.
Vietnam’s economy has shown resilience this year as investment pours in, with Prime Minister Pham Minh Chinh vowing to cut logistical costs and improve infrastructure. The government has sought to pull in capital from foreign tech giants such as Samsung Electronics Co. and Intel Corp. as the country emerges as a viable alternative to China in the production of electronics such as smartphones to basic semiconductors.
Investment and industry, especially manufacturing are among “the driving forces for growth” in the third quarter this year, the statistics office said in a statement on Sunday.
Super Typhoon Yagi battered the country last month, killing hundreds and wreaking economic damage that’s estimated at more than $3 billion. Factory activity in the trade-reliant economy contracted for the first time in five months in September, reflecting the severity of the storm, according to an S&P Global purchasing managers’ index report.
The State Bank of Vietnam may “turn more dovish” by lowering interbank interest rates to aid the economy after Yagi, according to Mitsubishi UFJ Financial Group Inc.
The government has predicted a hit of 0.15 percentage point on this year’s GDP growth, with the impact seen continuing in the last quarter. Vietnam has set a 2024 growth target of as much as 7%, from about 5% last year.
The International Monetary Fund expects Vietnam to grow 6.1% this year, slightly faster than its previous estimate, supported by “continued strong external demand, resilient foreign direct investment, and accommodative policies,” according to a Sept. 27 statement.
--With assistance from Clarissa Batino, Nguyen Xuan Quynh and Nguyen Kieu Giang.
(Updates with comments in paragraph four)
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