Hanoi (VNA) 🥂- HSBC reports that following a challenging year of 2023, the Vietnamese economy is forecast to improve in 2024, with exports surging by a remarkable 42% in January 2024.

On February 7, HSBC Global Research unveiled the report "Vietnam at a glance", indicating Vietnam's continued robust export growth, particularly in the electronics sector, driving a 42% export surge in January 2024.

Rapid Export Growth

According to HSBC experts, Vietnam witnessed an astonishing 42% increase in year-on-year export growth in January 2024, attributed to a stable recovery in electronic exports. The high pre-order volume for the new Samsung Galaxy S24 smartphones also contributed to the optimistic outlook. Export growth was also observed across sectors that experienced sluggish performance in 2023, such as textiles, machinery, and wood products, signaling a resurgence. However, HSBC experts advise Vietnamese businesses to remain cautious during this initial phase of trade recovery. Additionally, HSBC noted that the Purchasing Managers' Index (PMI) has finally rebounded above 50 after a five-month decline. Nevertheless, the continuous growth in new orders and export orders is still insufficient to stimulate increased hiring by businesses. Delayed deliveries exacerbated manufacturer costs, underscoring prolonged disruptions in the Red Sea area. Furthermore, inflation remains under control, with core inflation in January 2024 easing to 3.4% year-on-year. Although significantly lower than the government's inflation target 2024 of 4%-4.5%, inflationary risks still require attention.  

A new year with promising signs

HSBC analysts emphasized the importance of not only paying attention to the export cycle but also evaluating domestic demand. Currently, domestic demand is under increasing pressure but is expected to improve, indicated by some recovery in consumer goods stocks. In reality, Vietnam boasts a significant consumption share, accounting for over 50% of GDP. Growing at an average annual rate of 7.5% pre-pandemic, personal consumption has significantly declined since the outbreak, except for the reopening period in 2022. Personal consumption growth halved in 2023, reflecting the pronounced impact of the economic slowdown on households. Part of the reason is the effect of asset value fluctuations due to the cyclical weakening of the real estate sector, while another part is attributed to significant changes in consumer behavior since the pandemic. Consumers tend to be cautious about economic fluctuations, thus increasing their savings. This trend is further supported when looking at the Vietnamese labor market. While the unemployment rate remains low at 2.3%, job growth slowed in 2023 and has not fully recovered yet.   A piece of good news for Vietnam is the full recovery in the tourism sector, which is crucial for the labor market, supporting service sector workers. Thanks to favorable policies extending visa-free stays for tourists from certain countries and issuing e-visas for citizens of all countries from mid-August, Vietnam welcomed around 12.6 million international visitors, far exceeding the initial target of 8 million. Building on a more promising outlook, the Vietnam National Authority of Tourism has set an ambitious goal for 2024 to attract 17-18 million foreign visitors, nearing the record high of 2019. This is aimed at driving the tourism industry revenue to 840 trillion VND (34 billion USD), equivalent to 8% of GDP, surpassing the level of 2019./.