Vietnam GDP 2024 growth jumps to 6.9% in Q2

Richard Burrage
Jul 02, 2024

Vietnam GDP 2024 growth jumps to 6.9% in Q2. In the first half of 2024, Vietnam’s economy displayed a stark contrast between impressive headline GDP growth and underlying sectoral volatility. Vietnam achieved a 6.9% year-on-year GDP growth rate in the second quarter, spurred by strong exports and a manufacturing surge. Yet, domestic consumption lagged, presenting a mixed economic picture.

Volatility for business and manufacturing in Vietnam

The manufacturing sector stood out as a significant growth engine for Vietnam GDP 2024, with the Vietnam Manufacturing Purchasing Managers’ Index (PMI) reaching near-record highs due to a surge in new orders. Foreign direct investment (FDI) maintained a healthy pace, and a substantial trade surplus further brightened the economic outlook.

However, underlying concerns remain. Ongoing volatility is expected until at least 2026, exacerbated by delays in government approvals that are unlikely to be resolved before the next national assembly election, expected in May 2026. This bureaucratic stagnation impedes infrastructure spending, a crucial growth driver. Consequently, Cimigo‘s Vietnam GDP 2024 growth forecast remains a cautious 5.7%.

Vietnam Q2 2024 Economic performance vs Q2 2023

Vietnam CEO business confidence

While CEO sentiment in the CEO Pulse survey, measured by the Cimigo and the Business Executive Network, dipped in June, most CEOs remain optimistic about Vietnam’s long-term prospects.  Few CEOs expect conditions to worsen, but those expecting improvements have declined significantly.

Cimigo Vietnam CEO Business Confidence 2024

CEOs remain optimistic about Vietnam’s long-term prospects. Approximately half of the surveyed CEOs expect improvements in their businesses and the Vietnamese economy, though fewer expect the same for the global economy.

Cimigo Vietnam CEO Economic Outlook 2024

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Vietnam manufacturing saw new order growth surge to a near-record high

The sector experienced the sharpest increase in new business since March 2011.

Vietnam Purchasing Managers Index Trend 2024

The Vietnamese manufacturing sector burst into life midway through the year, shrugging off the relatively modest growth in recent months thanks to a rapid increase in new orders. The expansion’s strength in new work highlighted staff shortages at some firms and resulted in an accumulation of outstanding business. In response, firms took on additional staff at a solid pace.  The Vietnam Manufacturers Purchasing Managers Index is conducted by Cimigo and compiled by S&P Global.

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Vietnam consumer retail sales are muted

Muted consumer demand presents a challenge. Retail sales growth remains sluggish, lagging other economic indicators. This can be attributed to a shift in consumer behaviour towards thrift. Consumers prioritise value and delay high-ticket purchases, impacting discretionary spending and essential goods.

Retail expenditure growth, which contributes 55% of the economy, remains sluggish. Sales of goods and services increased by only 2.7% by YTD June 2024 over the same period last year. 

Sales of retail goods increased by only 0.9% by YTD June 2024. This is far below inflation, volumes have contracted. 

Sales of retail services increased by 9.5% by YTD June 2024, buoyed by a massive increase in the number of inbound tourists to 8,832,271 as of YTD June 2024 (a 58% increase compared with 5,574,969 YTD June 2023). 

Cimigo Vietnam on Retail Sales June YTD 2024

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The recent uptick in manufacturing and exports is expected to gradually translate into improved consumer spending in the latter half of 2024. However, Cimigo expects continued volatility in retail sales. Please see the report here for further analysis.

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