Vietnam’s economy is growing again, on the back of a strong rise in exports. The Southeast Asian nation looks to be one of the most clear-cut international beneficiaries of the U.S. stimulus package.
First-quarter gross domestic product was up 4.5% relative to last year’s figure, according to an initial estimate released Monday. The recovery is being driven by a surge in goods and services sold abroad, which rose almost 20% year-over-year in March. Sales to the U.S. specifically are likely rising even faster, with no sign of a slowdown on the horizon.
Using Vietnamese export data and U.S. data for imports from Vietnam, it is clear that the American share of Vietnam’s overseas sales has risen considerably. In the 12 months through January, U.S. imports from Vietnam were equivalent to about 29% of the Asian country’s total exports, far higher than the roughly 20% average before 2019. Some caution is needed when data come from different organizations, but historically the two series tend to match up with figures published with a lag by the International Monetary Fund, which are considered the gold standard.
Vietnam emerged as a big winner from the China-U.S. trade spat. Some supply chains reoriented away from China, and the country also was a logical docking station for multistage “transshipments” to avoid American tariffs.
Some of those gains may not be repeatable, but given the fiscal splurge in Washington, it is likely that the U.S. share of Vietnam’s exports will remain high for some time. Domestic economic growth in the order of 6.5% this year—as forecast by the Organization for Economic Cooperation and Development—will keep U.S. import demand strong and business brisk for export-focused Vietnamese companies.