Vietnam Industry January 2020


Vietnam: Industrial production declines in January on Lunar New Year celebrations

January 29, 2020

Industrial production contracted 5.5% in January year-on-year, contrasting December’s 6.2% expansion. January’s reading was driven chiefly by lower output in the manufacturing and mining sectors. However, the Lunar New Year holiday distorted the reading, since there were fewer working days in January 2020 compared to a year prior.

Industrial production growth should bounce back in February, and is forecast to remain elevated in 2020, spearheaded by a burgeoning manufacturing sector. 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, thanks to a cheap workforce and business-friendly government. However, due to its open nature, the economy will remain vulnerable to a potential global economic slowdown, while possible U.S. tariffs would also hurt industrial activity.

FocusEconomics Consensus Forecast participants estimate that industrial output will grow 9.1% in 2020, which is unchanged from last month’s forecast. For 2021, panelists expect industrial production to expand 9.4%.

Author:, Economist

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Vietnam Industry Chart

Vietnam Industry January 20 20

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

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