Vietnam Q2 GDP growth quickens on strong exports, US trade deal brightens outlook

Concerns over the Southeast Asian manufacturing hub's outlook had been growing in the run up to the trade deal announced on Wednesday, particularly as the United States is Vietnam's biggest export market.

Gross domestic product growth in the April-June quarter accelerated to 7.96 percent year-on-year, from the 6.93 percent in the first quarter, government data showed on Saturday.

It was just short of Hanoi's full-year growth target of at least eight percent.

"Economic performance in the first half of this year was positive and close to our target amid global and regional economic uncertainties," the National Statistics Office said.

Exports were a bright spot in the last quarter, rising 18.0 percent to $116.93 billion from a year earlier, while imports were up 18.8 percent at $112.52 billion, translating into a trade surplus of $4.41 billion, the NSO data showed.

Industrial production in the period rose 10.3 percent, while June consumer prices rose 3.57 percent.

The United States is the largest export market for Vietnam, a regional manufacturing hub housing several multinational companies such as Samsung Electronics and Foxconn.

The United States recorded a trade deficit of $123 billion with Vietnam last year, one of its highest globally.

Fitch Solutions said in a note on Friday that Vietnam's exports and investment will remain strong for the rest of the year and signaled upside risks for its 2025 GDP growth forecast of 6.4 percent.

Dominic Scriven, founder and chairman of investment firm Dragon Capital, said the trade deal is "net-positive" and the potential GDP hit is less severe than feared.

"With external trade risk now moderating, attention can return to the country's core growth engine, the domestic and private sector economy," he said.