Vietnam has been able to maintain high GDP growth but consumer spending has remained weak Below potential A recent report by the General Statistics Office of Vietnam highlights a troubling phenomenon. Even though the economy is poised for 7% GDP growth this year, consumer spending is woefully low. The report showed that total retail sales revenue from goods and consumer services grew by 8.5% in the first 10 months of the year. However, when adjusted for inflation, this increase shrinks to just 4.6%. These figures are lower than in previous years, in which growth reached 9.8% and 7.3%, respectively. This trend indicates that consumer spending, a key driver of GDP growth, is slowing after its 2022 post-Covid surge. At an investment forum on November 8, Nguyen Ba Hung, chief economist for the Asian Development Bank (ADB), said that while exports, imports, and investments have been fueling Vietnam’s economy this year, domestic consumption has been struggling to keep pace. In late October, Frederic Neumann, chief economist for Asia-Pacific Economic Research at HSBC, said that Vietnam’s retail sales, though growing, are below pre-Covid levels. “The numbers are not terrible, but there is a gap to close,” he noted. Inflation impacts spending One […]
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