Vietnam: Industrial production growth picks up in December
December 29, 2019
Industrial production rose 6.2% in December year-on-year, up slightly from November’s revised 5.5% expansion (previously reported: +5.4% in November year-on-year). December’s uptick was driven by a rebound in the mining and quarrying sector and faster growth in the manufacturing sector. Over 2019 as a whole, industrial production expanded an impressive 9.1%, comparing extremely favorably to regional peers.
Industrial production growth 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.
Author: Oliver Reynolds, Economist