Vietnam’s GDP growth marks its highest Q1 level in five years. According to the GSO, Vietnam’s GDP grew 5.7% YoY in Q1 2024, the highest Q1 growth over the past five years. Among the three main sectors of the economy, the services sector was the key driver with 6.1% growth, contributing 52.2% to overall GDP growth in Q1 2024. Meanwhile, the industry & construction sector rebounded with growth of 6.3% (vs -0.4% YoY in Q1 2023; contributing 41.7% to overall growth).

Q1 2024’s GDP results are in line with our expectations. Therefore, we maintain our GDP growth unchanged at 6.5% for 2024F. Supporting factors for economic growth include: (1) More positive expectations for global growth as the consensus forecast for 2024F global GDP growth increased to 2.8% at the beginning of April (from 2.6% at the beginning of January); (2) Fiscal support (e.g., public investment disbursement, VAT cuts, fee reductions, public sector salary reform, among others); (3) Supportive monetary policy from the SBV – we expect the SBV to maintain a loose monetary stance to support the economy in 2024; (4) Solid growth of FDI disbursement; (5) Further recovery in foreign inbound tourism, especially from China; (6) Recovery in real estate & construction activity.

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