Vietnam on rough recovery trajectory in Apr 2024: HSBC report

11 May '24

2 min read

Vietnam continued its rough recovery trajectory in April this year, reflecting partly the highly uncertain global environment, according to the April report ‘Vietnam at a glance’ released recently by HSBC. Textiles and footwear exports stalled in its recovery, falling by almost 3 per cent year on year (YoY) during the month.

The country’s overall exports increased by 10.6 per cent YoY in April.

Several exporters noted concerns arising out of the Red Sea disruptions for trade with Europe, domestic media outlets reported citing the HSBC report.

Fresh foreign direct investment (FDI) into the country’s manufacturing sector enjoyed an annual increase of 50 per cent, while FDI disbursements also rallied to a multi-year-high, exceeding $6 billion in the first four months this year.

While the demand for goods is still recovering, inflation seems to be an imminent concern, the HSBC report notes. Headline inflation rose by 0.1 per cent month on month (MoM), pushing the YoY print to 4.4 per cent, in line with consensus of HSBC at 4.4 per cent.

This is the first time in more than 18 months that inflation has been approaching so close to the State Bank of Vietnam’s 4.5-per cent inflation ceiling.

Experts anticipate inflation will breach the 4.5-per cent ceiling in the second quarter (Q2) this year, but only for a brief duration, before likely dropping below 4 per cent in Q3.

Fibre2Fashion News Desk (DS)

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