The report, which was released by the Vietnam Institute for Economic and Policy Research (VEPR), said the positive growth momentum in the latter half of 2017 seems to have helped fuel the growth in Q1 this year.

Processing and manufacturing continued to be a key driving force for the economy with an expansion of up to 13.56 percent, it noted, adding that Samsung Vietnam remained the biggest contributor to the processing and manufacturing industry. The firm’s export of mobile phones and components reached 12.3 billion USD in the three months, surging 58.8 percent year on year.

The mining industry rebounded with a growth rate of 0.4 percent after two consecutive years of contracting. Industrial production output increased by 11.6 percent from a year earlier, much higher than the growth of the same period of recent years.

VEPR Director Nguyen Duc Thanh said most of the added value in this sector came from foreign direct investment (FDI) companies, as the manufacturing industry received great contributions from foreign enterprises.

This posed challenges for sustaining growth in the following quarters as well as for the whole of 2018 and beyond, as Vietnam’s economic growth is increasingly dependent on the FDI sector, Thanh said.

The report also noted that exports in the first three months are estimated at 54.31 billion USD, up 24.3 percent year on year. Up to 39.34 billion USD or 72.4 percent of the revenue came from FDI companies. 

Meanwhile, 53.01 billion USD worth of goods were imported in the period, including 31.75 billion USD by FDI businesses and 21.26 billion USD by domestic firms.

Thanh said these figures show a trade surplus in the FDI sector and a trade deficit in the domestic sector, indicating that foreign enterprises continue to be the trade locomotive of Vietnam’s economy.

According to the report, the rise of new jobs did not match the high economic growth in Q1 compared to the same period last year. More than 225,000 new jobs were created between January and March of 2018, fewer than the over 291,000 new jobs in Q1 last year.

Thanh said the fewer number of new jobs amid a high growth rate once again brings into question the growth quality and the real strength of the domestic sector.

The economy is predicted to continue expanding in the following quarters but the growth will not as high as in Q1. The report said this year’s GDP growth target might clock in at 6.83 percent, higher than the 6.5 to 6.7 percent goal set by the National Assembly. Economic growth rates for the upcoming quarters are forecast at 6.51, 6.84 and 6.75 percent, respectively.-VNA