Vietnam Industry December 2020

Vietnam

Vietnam: Industrial output records quickest growth since February in December

December 29, 2020

Industrial output rose 8.2% in year-on-year terms in December, which was above November's 6.9% increase. December's print marked the strongest expansion since February. The reading reflected a broad-based uptick in output, with activity in the manufacturing, electricity and mining and quarrying sub-sectors all improving in December.

Meanwhile, the trend improved significantly, with the annual average growth of industrial production coming in at 2.6% in December, up from November's 2.0% reading.

This year, industrial production should accelerate from 2020’s slowdown as economic activity ramps up abroad. Moreover, the underlying strength of Vietnam’s industrial sector remains intact despite Covid-19: Vietnam is an attractive low-cost base for manufacturing firms, including those looking to relocate from China due to the U.S.-China trade spat. Moreover, the recent signing of the RCEP trade pact that includes China, Korea and Japan is a further boost to the industrial sector in the coming years. However, uncertainty regarding the evolution of the pandemic and the rollout of vaccines across key international markets clouds the outlook.

FocusEconomics Consensus Forecast participants estimate that industrial output will grow 8.9% in 2021, which is up 0.9 percentage points from last month’s forecast. For 2022, panelists expect industrial production to expand 8.4%.


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Vietnam Industry December 20 20 0

Note: Year-on-year variation of industrial production index in %.
Source: General Statistics Office of Vietnam (GSO) and FocusEconomics calculations.


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