By Khanh Vu and Phuong Nguyen
HANOI (Reuters) -Vietnam’s economy accelerated in the third quarter, despite a 20% U.S. tariff in force since August 7 that is slowing Vietnamese exports to the United States, especially of footwear and textiles, government data showed on Monday.
Gross domestic product in the Southeast Asia nation rose 8.23% in the July-September period from a year earlier, accelerating from an upwardly revised 8.19% in the second quarter.
The acceleration supports the Vietnamese government’s target of 8.3%-8.5% expansion this year, but appears at odds with forecasts from international organisations. The World Bank projects 6.6% growth this year, while the International Monetary Fund estimates 6.5%.
Growth was driven by foreign investment and rising exports, which continued to increase in the third quarter from a year earlier despite U.S. tariffs that took effect in early August.
However, monthly data showed a slowdown, with September exports down 1.7% from August. Shipments to the United States, Vietnam’s main market, fell 1.4% compared to August, marking the second consecutive monthly drop, according to data from Vietnam’s statistics agency.
FOOTWEAR EXPORTS TO US DOWN
Among industrial sectors that saw a drop in exports to the U.S., footwear was the hardest hit, recording a 27% drop in September from August, data from the customs department showed.
Vietnam is home to large manufacturing operations of big footwear multinationals, including Nike, Adidas, and Puma, which produce a large part of their global output of shoes through suppliers in Vietnam.
Textile and garment exports to the United States fell 20%, but rising shipments of coffee, chemicals and some electronics partly offset those losses.
Compared to a year earlier exports to the United States increased by 38%. Total exports over the July-September period rose 18.4% from a year earlier to $128.57 billion, while imports jumped 20.2% to $119.66 billion, resulting in a trade surplus of $8.91 billion, the statistics office said.
Industrial production rose 9.1% in the first nine months of this year from a year earlier, while foreign investment inflows rose 8.5% on the year to $18.8 billion, the highest in five years.
TOURISM, LENDING, CONSUMERS SUPPORT GROWTH
Vietnam’s stock market rose 2% on Monday after the economic data was released.
Growth was helped by a booming tourism sector, with foreign arrivals to the country in the first nine months of this year up 21.5% compared to the same period in 2024, for a total of 15.4 million.
A splurge in lending is also supporting economic expansion, with the central bank expecting credit to increase by 19% to 20% this year.
Retail sales increased 11.3%, while consumer prices in September rose 3.38% from a year earlier, below a target of 4.5% to 5.0% this year.
(Reporting by Khanh Vu, Phuong Nguyen and Francesco Guarascio; Editing by David Stanway and Kate Mayberry)
