Vietnam august exports slide, but factory output improves

Vietnam’s exports in August fell 7.6 per cent from a year earlier, official data showed on Tuesday, making a sixth straight month of decline as weak global demand weighs on the export-reliant economy.

Industrial output rose 2.6 per cent in August, however, a second successive month of growth for Vietnam, an Asian manufacturing centre for major global electronics and clothing brands.

Imports for August fell 8.3 per cent from a year earlier to $28.55 billion, resulting in a trade surplus of $3.82 billion, the General Statistics Office (GSO) said in a report.

Vietnam is struggling from subdued global demand and tightening moves by the U.S. Federal Reserve, despite the State Bank of Vietnam (SBV) cutting policy rates four times this year to shore up growth.

Though industrial output for January-August fell 0.4 per cent from a year earlier, the GSO said the recent factory numbers were headed in the right direction.

“The global economic difficulties in the first months of this year have affected domestic industrial production, but the August reading has shown a positive trend,” the GSO said in a statement.

Weak external demand has seen manufacturers cut tens of thousands of jobs and has prevented some businesses from taking bank loans to boost production. Credit growth slowed to 4.3 per cent at end-July, half the rate of the same period last year.

For the first eight months, Vietnam’s exports fell 10 per cent from a year earlier to $227.71 billion, while imports were down 16.2 per cent to $207.52 billion, with an estimated trade surplus of $20.19 billion over that period, it said. August exports were worth $32.37 billion.

January-August exports to most of Vietnam’s key markets fell from a year earlier, down 19.1 per cent to the United States and down 8.3 per cent to the European Union.

Shipments of smartphones, Vietnam’s largest export earner, fell 15.4 per cent, while exports of garments were down 15.0 per cent and footwear products down 17.6 per cent, the data showed.

Retail sales in the January-August period rose 10 per cent from a year earlier and rose 7.6 per cent in August year-on-year and August consumer prices rose 2.96 per cent from a year earlier.

Output of smartphones, mostly for Samsung Electronics, fell 17.7 per cent from a year earlier to 119.9 million units, while garment and footwear output was down 5.8 per cent and 4.3 per cent, respectively.

Vietnam’s trade weakness was not over yet and would continue to weigh on growth, Oxford Economics said on Tuesday, adding it expected the SBV to make another 50 basis points cut in its policy interest rate by the year-end.

ChannelNewsAsia.com avec Reuters – 29 août 2023