Vietnam’s exports, domestic demand moderating: World Bank

The December report, titled ‘Vietnam Macro Monitoring’, shows that due to weaker external demand, the growth of industrial production in November declined by 5.3 per cent year on year (YoY), the lowest rate since February 2022.

The World Bank has said two primary drivers of Vietnam’s economic growth—exports and domestic demand—are moderating. In a report released recently, the bank said softer external demand has weighed on the country’s exports, post-COVID consumer recovery is slow and tighter domestic financial conditions and rising inflation could affect future domestic demand.

Consumer price index (CPI) inflation reached 4.4 per cent YoY in November, up 0.1 per cent compared to a month earlier. Core inflation increased from 4.5 per cent in October to 4.8 per cent in November.

The manufacturing purchasing managers’ index (PMI) also slipped below the 50 benchmark for the first time since October last year. Retail sales decreased to 17.5 per cent in November this year from 20.7 per cent in the previous month.

Merchandise exports contracted by 8.4 per cent YoY due to weakening external demand and high base effects associated with the rebound in the four quarters of 2021, the report said.

While total foreign direct investment (FDI) commitment dropped by 1.9 per cent YoY, FDI disbursement maintained a robust growth of 4.4 per cent compared with the same period last year.

Fibre2Fashion News Desk (DS)