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Vietnam’s economy expands 6.7%, June trade surplus at US$400m versus US$1.5b deficit last month

[HANOI] Vietnam's economy grew at a faster pace in the second quarter of this year than economists predicted, underpinned by foreign investment and export growth.

Meanwhile, its June trade surplus was likely US$400 million, and its annual consumer prices increased 2.16 per cent this month.

Gross domestic product rose 6.71 per cent from a year earlier, down from a revised 6.82 per cent in the first quarter, according to data from the General Statistics Office (GSO) in Hanoi on Friday.

The median estimate in a Bloomberg survey of five economists was for growth of 6.61 per cent.

TRADE SURPRLUS

Vietnam likely posted a trade surplus of US$400 million in June, compared with a US$1.3 billion deficit in May, government data released on Friday showed.

Exports in June likely rose 8.5 per cent from a year earlier to $21.6 billion, while imports rose 10.0 per cent to $21.2 billion, the GSO said in a statement. The GSO's trade data is subject to revision next month.

Smartphones, garments and electronic home appliances were among the largest export earners in June. Key imports were electronics, machinery and fabrics.

For the first half of this year, Vietnam's exports rose 7.3 per cent from a year earlier to US$122.721 billion, while imports were up 10.5 per cent to US$122.755 billion, resulting in a trade deficit of US$43 million, the department said.

Trade-reliant Vietnam has emerged as one of the biggest winners in Asia from the US-China trade war as manufacturers divert some of their operations to bypass higher tariffs. Foreign investment has climbed while exports to the US have surged.

At the same time, Vietnam is also coming under greater scrutiny from the Trump administration amid concerns some Chinese exporters are sending goods to the neighbouring country, where they are being illegally relabeled as made-in-Vietnam for export to the US.

CONSUMER PRICES

Vietnam's consumer prices in June rose 2.16 per cent from a year earlier, led by an increase in the cost of education services and housing, government data released on Friday showed.

The cost of education services rose 6.29 per cent in the period from a year earlier, while the cost housing was up 3.33 per cent, the GSO said.

Compared with last month, June consumer prices fell 0.9 per cent.

Core inflation - excluding food, energy, health care and education prices - rose 1.96 per cent in June from a year earlier and was 0.16 per cent from May, the GSO said.

Vietnam aims to keep inflation below 4 per cent this year.

REUTERS, BLOOMBERG