Production and export recovery, a boost for growth

Manufacturing accounts for a quarter of Vietnam's economy , so a recovery in manufacturing, driven by increased exports to the US, is likely to lift Vietnam's GDP growth from 5.1% in 2023 to 6.5% this year.

Thaco Trailers' semi-trailer shipment exported to the US in 2024.

"Vietnam is one of the three countries in the world that has the closest economic ties with the US, and strong US consumption is driving the recovery of Vietnam's exports , manufacturing and GDP growth," said Michael Kokalari, Director of Macroeconomic Analysis and Market Research at VinaCapital.

Over the first 8 months of 2024, Vietnamese suppliers exported 77.9 billion USD worth of goods to the US, up 25.4% over the same period last year. With this import level, the US continues to be our country's largest export market.

Source : General Statistics Office

Strong demand for “made in Vietnam” products from US consumers is strongly boosting Vietnam’s export recovery.

From a 21% decline in the first seven months of 2023 to a 24% increase in the first seven months of this year, manufacturing activity rose from 3.6% last year to an expected 10% this year.

“Manufacturing accounts for a quarter of Vietnam's economy, and it is forecast that manufacturing could increase by 10% in 2024. The recovery in manufacturing is likely to lift Vietnam's GDP growth from 5.1% in 2023 to 6.5% this year (in the first 6 months of 2024, GDP grew by more than 6.4%),” said Mr. Michael Kokalari.

According to VinaCapital: "The economy is being supported by a "K-shaped" economic momentum in the US this year. The Fed has raised interest rates in the US to cool down inflation, but instead of cooling down the US economy, higher interest rates have spurred increased spending from wealthy US consumers, represented by the upper part of the "K" in the "K-shaped" economy.

These consumers are now receiving higher investment income from their savings and are spending this “windfall income”, including on “Made in Vietnam” products.

“We believe that US consumer demand for products manufactured in Vietnam will slow down but not decline sharply in early 2025. We are optimistic that the recovery in Vietnam’s real estate sector and infrastructure investment will help boost GDP growth,” said Mr. Michael Kokalari.

At the same time, many are optimistic that the recovery in Vietnam's real estate sector and infrastructure investment will help boost GDP growth.

In addition, Vietnam recently raised its GDP growth target for this year from 6.5% to 7%, demonstrating the determination of policymakers to maintain strong economic growth. The two main levers that the government can use to accelerate growth in the short term are increasing the number of approvals for new real estate projects in Vietnam and increasing infrastructure investment.

Source: https://baodautu.vn/san-xuat-xuat-khau-phuc-hoi-cu-hich-cho-tang-truong-d224882.html