Macro Update - Trade surplus hits highest level in four years

- Production continued to recover. In August, the overall index of industrial production (IIP) rose 9.5% YoY (August 2023: +3.5% YoY), in which the manufacturing sub-sector IIP continued growing 10.6% YoY (August 2023: +4.3% YoY). In 8M 2024, the overall IIP and manufacturing IIP increased 8.6% YoY (8M 2023: -0.5% YoY) and 9.7% YoY (8M 2023: -0.7% YoY), respectively. Ongoing solid new orders, shown in S&P Global’s PMI report, signal that production and exports could continue growing. Nevertheless, the Yagi typhoon, which caused some disruption in production in several northern provinces, could negatively impact IIP in September.

- Retail sales recorded decent growth. In August, the total retail sales of goods & services increased 7.9% YoY. In 8M 2024, total retail sales rose 8.5% YoY (retail sales of accommodation & catering services: +14.3% YoY; retail sales of tourism services +26.2% YoY). We expect that the ongoing strong rebound of the tourism sector, especially from China, will continue to bolster retail sales in September. Additionally, Vietnam's national holiday in the beginning of the month could partly support retail sales. In addition, the Yagi typhoon directly hit northern Vietnam which could lift demand as people stocked up on essential items to prepare for the storm and then procurement for post-storm reconstruction.

Powered by Froala Editor