Electronic products are the driving force for export growth

Producing electronic components at EVA Company in Vsip industrial park (Hai Phong). Photo: TTXVN

Inventory decreased

According to Mr. Michael Kokalari, Director of VinaCapital Macroeconomic Analysis and Market Research Department, exports continued to increase in the fourth quarter of 2023, and increased sharply by 42% over the same period in January 2024 thanks to the increase of 33% in exports of high-tech electronic products. VinaCapital expects Vietnam's export recovery to continue its rapid growth momentum in the next months.

The strong growth of exports in January 2024 is due to an increase of nearly 60% over the same period in the export of computers and electronic products. Global personal computer (PC) industry revenue fell 30% year-on-year in early 2023, but grew again at the end of last year, partly due to users upgrading to higher configuration machines to handle AI (artificial intelligence).

Global smartphone revenue also grew again at the end of 2023. Vietnam's smartphone exports increased by 16% over the same period in January 2024 thanks to the opening sale of the new Samsung S24 phone model in this month.

According to Mr. Michael Kokalari, American businesses ordered too many "Made in Vietnam" products during supply chain disruptions due to Covid-19 and had to cut orders for these products last year to reduce the amount of inventory. However, after the fastest inventory decline in more than 10 years that trend is about to end. Therefore, Vietnam's export orders increased again in January 2024.

The same thing happened in China where new orders improved significantly last month. VinaCapital expects the number of export orders from Vietnam to continue to increase in the coming months.

VinaCapital's analysis also shows that the manufacturing industry increased by 19.3% over the same period in January 2024, so export growth far exceeds production growth. That means manufacturers' inventories fell last month. The combination of falling inventories and increased new orders means that factory production in Vietnam will need to ramp up to meet rising demand for “Made in Vietnam” products.

So, the economy will recover from increased manufacturing activity and higher consumption this year. VinaCapital expects consumer spending and domestic demand to be stronger in the later stages of this year.

​The processing industry regained momentum

The Ministry of Industry and Trade assessed that in January 2024, exports of processed industrial goods accounted for nearly 85% of the country's total export turnover, estimated at USD 28.52 billion, an increase of 7.4% compared to the previous month.

This growth momentum has a major contribution from all kinds of phones and components (export turnover of all kinds of phones and components in the first month of 2024 is estimated at USD 5.8 billion, an increase of USD 56.3 billion compared to the previous month because Samsung just launched the new product line Samsung Galaxy S24 in mid-January 2024). In addition, export turnover of wood and wood products also increased by 4.6% over the previous month, estimated at USD 1.4 billion. Similarly, transport vehicles and spare parts increased by 10.8%, estimated at USD 1.3 billion; Cameras, camcorders and accessories increased by 8.1%, estimated at USD 900 million.

Many key export items belonging to the processing industry group achieved high growth rates, even increasing by two to three digits, such as textiles and garments increased by 28.6%; wood and wood products increased by 74.6%; Shoes of all kinds increased by 35%; computers, electronic products and components increased by 57.4%...