Vietnam's exports show signs of recovery

Vietnam is recovering steadily from the global trade downturn and exports are likely to continue to accelerate as orders improve.

The above assessment was just made by HSBC on the basis that Vietnam's exports in October continued to regain growth momentum after showing signs of recovery since September. According to data from the General Statistics Office, the export turnover of goods last month was estimated at 32.31 billion USD, up 5.3% compared to September and up 5.9% compared to the same period in 2022.

However, the recovery was not uniform. Of the 34 main export items, 15 increased compared to the same period last year, driving the October export increase. Consumer electronics (excluding phones) have passed the trough, but textiles and footwear continued to see a decline in orders.

S&P Global Markets in a report on the same day also pointed out that new orders for Vietnamese goods increased for the third consecutive month thanks to improved customer demand. However, this growth rate was slight and at the weakest level in the current growth period. Incomplete statistics show that customers are still hesitant to commit to new orders.

Andrew Harker, chief economist at S&P Global Markets, said the pace of current order growth was not enough to encourage companies to increase production. Instead, businesses were using inventory to meet customer demand. The survey also showed another positive sign: employment was virtually unchanged, ending a seven-month decline. The reason was that businesses were preparing staff to meet the increase in new orders and the outlook for next year's output.

Import and export of goods at Tan Vu port - Hai Phong in October 2023. Photo: Giang Huy

In the first 10 months, export turnover is estimated at 291.28 billion USD, down 7.1% compared to the same period last year. However, with the momentum of the past two months, HSBC forecasts that export growth will continue to accelerate thanks to favorable base effects in the last two months of the year. This is a signal for a long-awaited recovery in the trade sector, contributing to raising the growth rate in 2024 to 6-6.5% according to the Government and 6.3% according to the bank's forecast.

The recovery is not limited to foreign trade. After domestic consumption improved slightly in the third quarter, retail sales continued to recover in October, rising 7% year-on-year. However, they remained slightly below the growth trend, and demand for consumer goods such as cars continued to decline by double digits.

Inflation also started the fourth quarter positively, increasing only slightly to 0.1% compared to September, equivalent to an increase of 3.6% compared to the same period in October 2022. This figure is below the forecast of Bloomberg (4.0%) or HSBC (3.9%). HSBC believes that inflation risks are generally under control.

The bank forecasts inflation to rise to 4% in the fourth quarter (from 2.9% in the third) but still below the ceiling of 4.5%. Next year, inflation is expected to be around 3.3%. Although countries in the region such as Indonesia and the Philippines are moving to raise interest rates, HSBC believes that the State Bank will not make a similar move because inflation does not appear to be a pressing concern. Therefore, the operating interest rate may remain at 4.5%.

Still, inflationary pressures are looming large at many manufacturing companies, according to S&P Global Markets. Companies say input costs and output prices are rising faster than they should. In fact, inflation has hit an eight-month high.

The impact of rising oil prices is widely believed to have increased input costs, with fuel and plastics among the items whose prices have been affected by higher oil costs. Meanwhile, the depreciation of the VND against the USD has also added to the pressure on costs. To compensate, companies have increased their selling prices sharply.

Telecommunications - Duc Minh

Vnexpress.net