Vietnam's economy has yet to show signs of bottoming out and bouncing back.

HSBC Vietnam Bank commented so in the report "Vietnam Data May - Long Way to Go".

Slowing external sector data remains the biggest risk to Vietnam's economic growth. (Photo: Viet An)

HSBC noted that although economic activity data in May 2023 did not deteriorate, Vietnam has yet to show signs of bottoming out and bouncing back amid mounting headwinds that are hampering growth. Meanwhile, slowing external sector data is also the biggest risk to growth.

The broad-based weakness in exports continues to weigh on Vietnam’s growth as none of the major sectors such as electronics, machinery, textiles/footwear and wooden furniture show any significant signs of recovery.

According to HSBC, although Vietnam's official export data for May has not been released, data up to April 2023 shows that orders have fallen sharply in Vietnam's three largest export markets: the US, China and the European Union (EU).

Imports fell much faster, down 18.3% year-on-year. That, it is argued, benefited Vietnam’s trade surplus, which stood at $2.2 billion, double the monthly average for 2022.

Vietnam’s services sector continues to be a bright spot, offsetting some of the weakness in the external sector, according to the bank. However, there is a big difference between high-value items, such as cars, and tourism- related services – a trend that is also taking place in other countries in the region.

On the positive side, the number of tourists entering Vietnam is on the rise. According to HSBC calculations, Vietnam has welcomed a total of 4.6 million international visitors since the beginning of the year, reaching 60% of the target of 8 million international visitors in 2023.

In addition, HSBC commented that another positive signal is that inflation continues to cool down. The overall inflation momentum remained stable in May, bringing the total inflation for the whole year compared to the same period last year down to 2.4%.

Source: https://baoquocte.vn/kinh-te-viet-nam-van-chua-co-dau-hieu-cham-day-de-bat-tro-lai-229231.html