HANOI: Vietnam’s economy slowed in the first quarter (1Q) from the three months prior, data showed last Saturday, as heavy exposure to Middle Eastern oil imports boosted inflation, presenting a challenge in reaching an annual growth target, authorities say.
Gross domestic product grew 7.83% in the quarter from January to March over the corresponding period a year earlier, but below 8.46% in the 4Q, the National Statistics Office (NSO) said in a report.
“The pressure from rising input costs and energy prices on inflation remains, posing challenges for economic governance,” the NSO added last Saturday.
Consumer prices rose 4.65% in March on the year, driven by a surge of 10.81% in transport costs, it said, accelerating from a rise of 3.35% in February.
This year’s growth target of at least 10% is under pressure as the South-East Asian economy imports more than 80% of crude oil supplies from the Middle East, where the Iran war, now in its sixth week, has disrupted shipments.
“Entering the 2Q, Vietnam’s socio-economic situation continues to face obstacles, and meeting the 2026 growth target remains a big challenge,” said NSO director Nguyen Thi Huong.
Rising fuel prices have spurred Vietnamese airlines to scale back operations and government efforts to cut costs, such as reducing taxes on fuel, subsidising prices and encouraging remote work to reduce consumption.
Growth was up from the 7.05% on-year expansion of the 1Q of financial year 2025.
According to the report, exports rose 20.1% in March to US$46.44bil from a year earlier. March industrial production rose 6.9% from a year earlier, but slowed from growth of 8.6% in the corresponding month last year.
The war has driven up gasoline prices 21% and diesel prices by 84% in Vietnam, data from top fuel trader Petrolimex shows.
Senior officials have sought alternative oil sources from suppliers such as Gulf states, Japan and South Korea.
Vietnam’s March imports rose 27.8% to US$47.11bil, for a monthly trade deficit of US$670mil. For 1Q, exports rose 19.1% to US$122.93bil and imports were up 27.0% at US$126.57bil, for a deficit of US$3.64bil.
Quarterly retail sales rose 10.9%.
Foreign investment inflows in 1Q rose 9.1% on the year to US$5.41bil, the NSO said, while pledges, which indicate the size of future inflows, rose 42.9% to US$15.2bil.
Vietnam will retain its target of 10% growth this year despite challenges, Prime Minister Pham Minh Chinh said last Saturday, promising steps such as greater public investment and diversification of export markets and supply chains.
“Our country still faces limitations, shortcomings, and many difficulties, challenges and risks related to the pressure of macroeconomic management and ensuring energy security,” Chinh told a cabinet meeting. — Reuters
