Vietnam: Industrial output growth dips in June
June 29, 2021
Industrial output expanded 4.5% year-on-year in June, which was a moderation from May’s 11.2% rise. June's reading was partly driven by a deterioration in manufacturing output. In addition, electricity production lost steam.
Meanwhile, annual average growth of industrial production was 7.7% in June, mirroring May's figure.
After last year’s slowdown, industrial production is projected to gain momentum on the back of returning demand from key international partners. Despite the ongoing Covid-19 pandemic, the underlying strength of Vietnam’s industrial sector remains intact: Vietnam is an attractive low-cost base for manufacturing firms, including those looking to relocate from China due to the U.S.-China trade tensions. That said, a relatively slow vaccine rollout, coupled with general uncertainty regarding the pandemic, pose a risk to the outlook.
Author: Stephen Vogado, Economist