Vietnamese export recovery gains momentum: VinaCapital

The first two quarters of 2023 saw Vietnam record negative export growth for the first time since the global financial crisis in 2008-2009. However, exports resumed growth in the fourth quarter of 2023 before surging by 42% in January 2024.

Michael Kokalari, chief economist at Vinacaptial, described January export growth as impressive, although the high January growth rates were boosted by the low base set by a drop in Vietnamese exports in early 2023.

He attributed this strong growth to a near 60% increase in computers and electronic exports. In fact, global personal computer sales plunged by 30% year on year in early 2023, although it resumed growth late last year.

Global smartphone sales also returned to growth late last year for the first time in two years, although the ongoing rebound is less pronounced than for laptop computers.

Meanwhile, Vietnamese smartphone exports grew by 16% in January, driven by the introduction of the new Samsung’s S24 smartphone during the month.

The economist also pointed out that another reason for Vietnamese export growth in January is there were more than 25% additional business days in January compared to January 2023, as the long Lunar New Year holiday (Tet) fell in January last year in contrast to February this year.

A simple “back of the envelop” calculation suggests that exports should have grown by around 25% in January, based solely on the number of additional business days, meaning that a 42% surge in exports in January was impressive, even accounting for the timing of the Tet holiday, he added.

VinaCapital anticipates that the number of Vietnamese export orders will continue rising moving forward due to the surprising strength of the US economy, as evidenced in the highest level of US consumer confidence recorded since the COVID-19 reopening boom.