Vietnam's exports fell 5.9 percent in May, the fourth straight month of contraction, reflecting sluggish global demand taking its toll on the manufacturing-dominated economy.

 

According to the export data released by the National Statistics Office of Vietnam on the 29th, the degree of contraction was moderate compared with the original estimate of 10.3% in the opinion of analysts surveyed by Bloomberg, but the 18.4% contraction in imports in May was worse than expected. From January to May this year, Vietnam’s exports fell by 11.6% to US$136.17 billion, of which smartphones, the largest export volume, declined by 16% to US$21.17 billion. Separately, industrial production in the January-May period fell 2 percent from a year earlier.

 

Other data released on the same day showed that headline inflation in Vietnam rose at an annual rate of 2.43% in May, the lowest level in 14 months. Core inflation, which excludes the cost of food, fuel, health care and education services, was 4.54%.

 

Export-reliant economies such as Singapore and Taiwan have been hit hard by a slump in global trade, while China's reopening of its economy has failed to achieve the expected benefits despite lifting anti-epidemic measures.

 

However, the slowdown in inflation has given Vietnam's central bank more room to cut interest rates to support the construction industry and stimulate the economy. Vietnam's central bank has cut policy rates three times this year.

 

Vietnam’s Ministry of Planning and Investment Chen Guofang pointed out that Vietnam’s economy will still face pressure from trade this year. Vietnam's processing and manufacturing sector declined significantly in the first quarter due to a slowdown in demand from trading partners including the United States, the European Union and Japan, he said in an online chat last weekend.

 

Vietnam's official forecast for this year's gross domestic product (GDP) growth rate is 6.5%, which is not as good as last year's 8.02%. However, on the 29th, Oxford Economics revised down Vietnam’s GDP growth forecast for this year from 4.2% to 3.0%. It means that Vietnam’s export prospects are still not optimistic, which casts a shadow on the recovery of the previous growth trend of GDP.” (Source: oney.udn 0530) ☺