HANOI : Vietnam’s economic growth slowed in the first quarter of the year, according to official data released on Sunday, as the export-reliant economy faces challenges in coming months after being hit with hefty U.S. tariffs.The country’s gross domestic product rose 6.93 per cent in the first three months, slowing from an annual pace of 7.55 per cent in the quarter ending in December, the National Statistics Office said in a report.
Exports and foreign investment in manufacturing are key drivers of Vietnam’s economy, but that model may come under pressure after President Donald Trump announced a 46 per cent tariff on exports to the U.S. from the Southeast Asian nation.
Industrial production rose 7.8 per cent in the first quarter from a year earlier, slowing from 11.5 per cent in the December quarter, according to the statistics office.
Exports grew an annual 10.6 per cent in the March quarter, accelerating from 7.9 per cent in the final quarter of 2024.
After the tariffs were announced, Prime Minister Pham Minh Chinh said the government’s target for at least 8 per cent growth this year was unchanged.
In a note published on Thursday, research firm BMI said the U.S. tariff rate on Vietnam was harsher than expected, and could see GDP growth miss its forecast for this year of 7.4 per cent by up to 3 per centage points.
“This will significantly damage Vietnam’s current FDI/export-based growth model, which heavily relies on exports to the U.S.,” BMI said.
Economic activity in Vietnam usually slows in the first quarter of the year because of disruption from week-long celebrations for the Lunar New Year.
Investment consultants have said growth may have been impacted this year as companies delayed investment decisions ahead of the tariff announcement.
A survey of U.S. manufacturers in Vietnam in February showed that most expected layoffs and disruption to their local operations in the event of tariffs.
Vietnam’s consumer prices rose 3.13 per cent in March from a year earlier, the statistics office said.
