In the first quarter of 2023, Vietnam's economic growth rate hit the "sharp brake", resulting in both export success and export failure. On March 27th, according to the Vietnam Economic Review, the shortage of orders at the end of 2022 is still ongoing, leading to many southern enterprises continuously reducing production scale, layoffs, and shortening working hours

　　7500 factories closed and dissolved

　　At present, more than 7500 enterprises in Vietnam have registered for suspension of business within a specified period, suspended operations pending dissolution, and completed dissolution procedures. In addition, orders from key export industries such as furniture, textiles, footwear, and seafood have mostly declined, putting considerable pressure on the 6% export growth target for 2023.

　　In March of this year, Vietnam's largest shoe factory, Baoyuan, submitted a document to relevant departments regarding the implementation of an agreement to terminate labor contracts with nearly 2400 workers due to order difficulties. A large company that used to be unable to recruit enough workers now has to lay off a large number of employees, indicating that enterprises in the leather, footwear, and textile industries are struggling.

　　The Ho Chi Minh City Business Association (HUBA) recently submitted a report to the Ho Chi Minh City People's Committee stating that 83% of units are facing difficulties after conducting an investigation of over 100 production and operation enterprises as of February.

　　Specifically, 43% of enterprises encounter difficulties when borrowing at high interest rates; 40% of enterprises face difficulties in financing, while 38.2% of enterprises report that loan procedures are cumbersome and time-consuming. In addition, 41.2% of enterprises reported a reduction in market space; 30.1% of enterprises are in difficulties due to high inventory; 17.6% are facing an increase in input materials.

　　Export plummeted 14.8% in March

　　In 2022, Vietnam's economy experienced a year-on-year growth of 8.02% and delivered a record that exceeded expectations. But at the beginning of 2023, "Made in Vietnam" stepped on the brakes. The extremely dependent export contraction has led to a slowdown in economic growth.

　　On March 29th local time, the Vietnamese Bureau of Statistics (GSO) released data showing that in the first three months of this year, Vietnam's GDP grew by 3.32% year-on-year, lower than the 5.92% in the previous quarter and also lower than the market consensus of 4.8%. At the same time, 3.32% is the second lowest GDP data of Vietnam in the first quarter in 12 years, almost as serious as when the COVID-19 epidemic started three years ago.

　　GSO stated that the slowdown in GDP growth was mainly due to a decrease in consumer demand, with overseas sales shrinking by 14.8% year-on-year in March and overall exports declining by 11.9% in the current quarter. Tran Thi Thu, Deputy Director of General Account Statistics at GSO, said that textile and footwear orders decreased by 70% to 80% in the first quarter, while electronic product shipments decreased by 10.9% year-on-year.

　　The most important export processing product in Vietnam is electronic products, ranking 12th in the world in terms of export volume, with mobile phone exports ranking 2nd in the world. This has also led to a decline in Vietnam's overall exports. GSO said that the global economy is in a complex development process and full of uncertainty, indicating the trouble caused by high inflation and weak demand in the world.

　　This is very different from last year's situation. Throughout 2022, Vietnam's exports of goods and services amounted to $384.75 billion. Among them, the export value of goods was 371.85 billion US dollars, an increase of 10.6% compared to the previous year; The export value of services was approximately 12.9 billion US dollars, a year-on-year increase of 145.2%.

　　Worries about a global economic slowdown continue to intensify

　　GSO stated in a statement that Vietnam is one of the world's largest exporters of clothing, footwear, and furniture. However, in the first quarter of 2023, Vietnam is facing "unstable and complex development of the world economy": as some countries tighten monetary policies, the world economy slowly recovers, reducing consumer demand from major trading partners. This has had an impact on Vietnam's import and export volume.

　　In an earlier report, the World Bank stated that economies like Vietnam that rely on commodities and exports are particularly vulnerable to the slowdown in demand, including exports.

　　This situation is not only happening in Vietnam, but also in South Korea, known as the "global economic canary", where exports continue to be sluggish, exacerbating concerns about the country's economic prospects and global economic slowdown.

　　On March 31st, data released by the South Korean Ministry of Industry showed that due to the economic slowdown and weak global demand for semiconductors, South Korea's exports in March decreased by 13.6% year-on-year, marking the sixth consecutive month of decline and experiencing a trade deficit for 13 consecutive months.

　　In addition, the World Trade Organization (WTO) released its latest Global Trade Outlook and Statistics report on April 5th, predicting that global commodity trade growth will slow to 1.7% this year, which is lower than the growth rate of 2.7% in 2022 and the average growth rate of 2.6% in the past 12 years. He also warned of the risks brought by uncertainties such as the Russia-Ukraine conflict, geopolitical tensions, food security challenges, inflation and monetary policy tightening.