Vietnam Q3 GDP Growth: 5.14%

Which suggests that Q3 accelerated on a q/q basis from the 5% annualised growth reported in Q2 although they did not release an actual number for Q3.

Working backwards HSC estimates Q3 GDP of 5.56% y/y. Which compares nicely against the 5.39% y/y growth reported in Q3 FY2012. However this still suggests that the full year trend is running slightly below our expectations. We don’t have any breakdown yet but our main suspect is slower than expected growth in the manufacturing sector in Q3. A 1-H recovery in that sector stalled in the early summer as inventories jumped.

Based on this, the official target of 5.5% GDP growth may be a little out of reach. And HSC has put its own 5.6% target for the full year under review also. We may revise this down to 5.4% or so once we see the full numbers. Even so we note that Q4 is always the strongest quarter in any year as much settlement and booking takes place at the end of the year. For example last year Q4 GDP grew by 5.57%. Hence a final number for FY2013 close to 5.5% is almost assured

Not much detail to go by although the media reports some fragments such as that for the first nine months of FY2013 the services segmented posted growth of 6.25% y/y; the constructionindustry sector grew 5.02% y/y while the primary sector; agriculture, forestry and fisheries was up 2.39% y/y. As mentioned we have no news on how the all important manufacturing sector did but all the evidence points to a mild acceleration on Q2 at best.

And this is likely why the overall Q3 GDP number fell a little short of expectations as generally Q3 sees a decent acceleration in the y/y growth trend for the manufacturing sector. As we run up against end of year seasonal demand. This year was different as summer orders sagged while finished goods inventories were higher than desirable given weak demand. Even so we have seen signs of recovery since August suggesting that in Q4 the manufacturing segment will see far better numbers.

In any event this is simply a pre-release and the official numbers won’t come out until the 27th when we will comment in more depth.