Vietnam's annual economic growth slowed to an estimated 5.46 percent in the first quarter, the slowest expansion for any quarter since January-March 2014, due mainly to the country's worst drought in 90 years. Cold spells in the northern region, drought in the central part - including the Central Highlands coffee belt - and salination in the Mekong Delta have affected the industrial and farm sectors as well as exports and imports, the General Statistics Office (GSO) said on Friday in its March report.
The main economic drivers in January-March were industrial and construction sectors, expanding at an estimated pace of 6.72 percent, followed by a 6.13 percent rise for the service sector, the GSO said. In the first quarter, the agricultural sector contracted 2.69 percent from a year earlier, with rice output in the Mekong Delta dropping 6.2 percent, or a loss of 700,000 tonnes.
In January-March, Vietnam had a trade surplus estimated at $776 million, with imports falling 4.8 percent from a year earlier and exports rising 4.1 percent. In the first quarter of 2015, Vietnam had a $2.6 billion trade deficit. First-quarter growth in Vietnam is usually slower than other quarters due to its long Lunar New Year holiday. The economy had annual growth of 7.01 percent in the last three months of 2015, the fastest pace since the fourth quarter of 2010.
Growth of industrial output from Vietnam's booming manufacturing sector, mostly electronics, garments and footwear, slowed to an estimated 6.3 percent, from a rise of 9.1 percent in the same period last year, Lam added. In 2015, Vietnam's economy expanded 6.68 percent, the fastest pace since 2007, fuelled by manufacturing and record foreign investment. Vietnam and the Philippines were the only bright spots among the larger economies in Southeast Asia last year. Vietnam has projected growth of 6.7 percent this year, but Lam said the economy could face headwinds.