Colliers International Vietnam has provided an outlook for Vietnam's economy following Q1 2018 in their Vietnam Real Estate Quarterly Knowledge Report.

At a glance:

• GDP achieved an increase of 7.38% in Q1 2018 compared to Q1 2017.
• CPI 2.82% higher than CPI of 2017.
• Total FDI in Vietnam between JAN-MAR stood at USD 5.8 billion.
• Total revenue from retail trade and services exceeded USD 44.05 billion in Q1 2018, an increase of 10% YoY.
• Q1 international arrivals reached 4,205,401 arrivals, an increase of 30.9% over the same period last year.
• Export turnovers of goods in Q1 estimated to reach USD 54.31 billion, up 22% from last year.
• HCM City remained the largest recipient of remittances, with inflows estimated at USD 5.2 billion, a 4.5% YoY increase. 

GDP

GDP in the first quarter of 2018 achieved an estimated increase of 7.38% compared to the same period last year. This is the highest growth rate of the first quarter in the last ten years, starting with the assurance that the Government has demonstrated effective solutions on all levels, sectors and localities in the first days and first months of 2018. As a result, the agriculture, forestry and fishery sectors rose by 4.05% QoQ. Manufacturing was also a key contributor to growth, rising 13.56% over the quarter driven by a 9.07% rise in the industry and construction sector; the service sector expanded by 6.7% over the same quarter of the previous year.

CPI and inflation

Consumer price index (CPI) in March was up 0.97% since last December, making the average CPI in first quarter 2.82% higher than the CPI of 2017. Core inflation in March 2018 decreased by 0.09% over the previous month however still up by 1.38% from the same period last year. Average core inflation in the first quarter of 2018 rose by 1.34% compared with the corresponding period in 2017.

Foreign Direct Investment (FDI)

Total FDI in Vietnam between January and March 2018 stood at approximately USD 5.8 billion, 24.8% down on the same period last year. However, there was still USD 2.12 billion coming from 618 newly licensed projects. The remainder was contributed by 199 currently-operating projects that raised their capital by more than USD 1.79 billion in total. Indeed, the manufacturing and processing industries are the main destinations of FDI inflows, receiving USD 3.44 billion, comprising 59.4% of the total registered FDI. The Republic of Korea is still the leading investor in Vietnam’s FDI projects with USD 1.84 billion. Hong Kong and Singapore’s FDI is behind Korea but levels are increasing over time.

Retail Sales

According to the General Statistics Office (GSO), the total Vietnam revenue from retail trade and services exceeds USD 44.05 billion in the first quarter of 2018, an increase of 10% YoY. The retail sales of goods, which accounted for more than 75% of the revenue, topped USD 35.22 billion, up 10.5% YoY. Overall, all the sectors show positive signs including food and foodstuff (up 12%), textiles and garments (up 13%), home appliances (up 11%) and transport services (up 8.4%).

International Arrivals

Total international arrivals in first three months reached 4,205,401 arrivals, an increase of 30.9% over the same period last year. Based on booking data in the first quarter of 2018, Airbnb announced a list of the world’s top 10 destinations for the coming year, in which Da Nang ranks fifth in booking, surges up 25.5% against the same period this year while Hanoi comes 9th on the list, with a 21.2% year-on-year increase.

Trade Balance

Export turnovers of goods in the first quarter of 2018 was estimated to reach USD 54.31 billion, up 22% from the same period last year, of which the domestic economic sector achieved USD 14.97 billion, up 18.9%; the FDI sector (including crude oil) gained USD 39.34 billion, rose by 23.2%. Import turnovers of goods in the first quarter of 2018 reached an estimate of USD 53.01 billion, an increase of 13.6% from the same period last year, of which the domestic economic sector gained USD 21.26 billion, climbing by 13.4%; the FDI sector achieved USD 31.75 billion, increasing by 13.7%. The trade deficit of services in the first quarter was USD 391 million, equaling 10% of the service export turnovers.

Remittances and Real Estate Enterprises Development

In the first quarter of 2018, HCM City remained the largest recipient of remittances in Vietnam, with the inflows estimated at USD 5.2 billion, a 4.5% YoY increase. However, according to the National Center for Information and Forecast of Social - Economic (NCIF), in 2018 further pressure on remittances to Vietnam will keep on this year due to the recovery of the world economy, high remittances costs and coordination between stakeholders. 

Click here to view Colliers International Vietnam Quarterly Knowledge Report Q1 2018.

For more information or to discuss the report phone or email David Jackson and Hoan Vo of Colliers International Vietnam via the contact details listed below. 

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