Macro Update - Exports and imports improve to 12-month highs
  • 2023-09-11T00:00:00
  • Macroeconomics

- Production continued to improve in August. The overall index of industrial production (IIP) improved by 2.9% MoM and 2.6% YoY in August. Specifically, the IIP of the manufacturing sector increased by 4.2% MoM and 3.5% YoY. However, overall 8M 2023 IIP slid by 0.5% YoY, while the manufacturing sector’s IIP fell by 0.7% YoY as weak export demand in H1 2023 dragged production. According to S&P Global, the Vietnam Manufacturing Purchasing Manager Index (PMI) rose to 50.5 in August, marking the highest level observed over the past six months. This uptick was driven by an increase in new orders, new export orders and production after five consecutive months of declines. The latest PMI results indicate a marginal monthly improvement in business conditions in the manufacturing sector. We expect to see gradual improvements in exports and production in the coming months ahead of Black Friday and the holiday season.

- Retail sales rose ahead of the new school year. In August, total retail sales of goods & services increased by 0.9% MoM and 7.6% YoY. In 8M 2023, total retail sales of goods & services increased by 10.0% YoY (+7.7% in real terms), attributed to strong retail sales of food/foodstuffs (+12.1% YoY), education accessories (11.0% YoY), accommodation & catering services (+15.6% YoY), and tourism (+47.0% YoY). We maintain our view that the ongoing strong rebound of the tourism sector will continue to bolster retail sales. There is potential for retail sales to improve further in September due to the long public holiday at the beginning of the month.

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