Hanoi (VNA) – With noteworthy signs of recovery inthe first two months of this year, the national economy is expected to bounceback quickly this year.

Vietnam faced a host of challenges last year, particularlyin its economic landscape, with key driving forces enduring periods ofstagnation. Moreover, due to difficulties arising from the decline in globalmarket demand, its exports had experienced negative growth for the first timesince 2009.

Statistics showed its total trade turnover in theyear was estimated at 683 billion USD, a year-on-year decrease of 6.6%. Specifically,exports dropped by 4.4%, and imports down 8.9%.

However, the country earned up to 113.96 billion USDfrom exports-imports in the first two months of this year, a year-on-year riseof 18.6%, with exports up 19.2% and imports up 18%, and a trade surplus of 4.72billion USD.  

US firms excessively ordered “Made in Vietnam”products during the COVID-19 supply chain disruptions and then subsequentlyslashed their purchases last year to reduce their bloated inventories, accordingto Michael Kokalari, chief economist at investment fund VinaCapital.

However, following the most aggressive pace ofinventory destocking in over 10 years, that trend is now ending, andconsequently Vietnam’s exports revived in January.

“We expect Vietnam’s export orders to continueincreasing in the months ahead due to the surprising strength of the USeconomy, as evidenced by the highest level of US consumer confidence since theCOVID reopening boom,” he said.

Besides, Vietnam's inventory also sharply decreased inthe first month of this year. The Purchasing Managers' Index (PMI) rose, for thefirst time in four consecutive months, above the threshold of 50 points, reaching50.3 points in January, turning itself a crucial driver of the domesticmanufacturing sector.

In the January-February period, the country’s indexof industrial production (IIP) expanded by 5.7% year-on-year, compared to the decreaseof 2.9% recorded in the same period last year.

Increased production implies higher income for labourers,providing strong support for consumer spending growth, and subsequently pushingmanufacturing, business, and services.

According to the General Statistics Office under theMinistry of Planning and Investment, the total retail sales of goods andrevenue from consumer services in the first two months reached 1.03 quadrillionVND (41.72 billion USD), up 8.1% month-on-month.

Notably, the foreign direct investment (FDI) influx continued to rise in the two months, hitting 2.8 billion USD, up 9.8%year-on-year, demonstrating strong confidence of foreign investors in thecountry’s economic potential.

Kokalari, however, forecast that Vietnam’s exportswill continue to face challenges as global demand for goods could persist atlow levels due to the ongoing high inflation.

At a recent meeting with the Co-operative Bank ofVietnam (Co-opBank), National Assembly Chairman Vuong Dinh Hue stressed that toachieve the socio-economic targets set for 2024 and the 2021-2025 period, itrequires joint efforts by the Government, business and people, with the bankingsector playing an important role.

The sector, therefore, was asked to improve itsforecast ability, keep a close watch on the regional and global economic situation,especially energy prices, to devise appropriate money policies and ensure theharmony between reducing interest rates and stabilising exchange rates./.