Impact of Lunar New Year Celebrations on Vietnam’s Exports and Industrial Production
Challenges Faced by Vietnam
Vietnam witnessed a significant decline in exports and industrial production in February compared to the previous year, a trend attributed to the extended Lunar New Year holiday period. Despite concerns about the Red Sea shipping crisis, the primary cause of the downturn was the festive season’s impact on economic activities.
Export and Production Data
Preliminary estimates from the General Statistics Office (GSO) revealed a 5% drop in exports and a 6.8% contraction in industrial production in February. While disruptions in shipping routes through the Red Sea contributed to increased cargo costs, the overall effect on Vietnam was limited, according to the country’s trade ministry.
Positive Outlook
Economist Vo Tri Thanh highlighted that the statistical comparison was skewed by the timing of the Lunar New Year celebrations, with 2023 experiencing the holiday in January. Despite the February setback, the data for the first two months of 2024 showcased promising growth in both exports and industrial production, driven by a robust performance in January.
Economic Performance in 2024
During the January-February period, exports surged by 19.2% year-on-year to $59.34 billion, while imports also saw an 18% increase to $54.62 billion. This positive trade balance resulted in a surplus of $4.72 billion. Additionally, industrial production index rose by 5.7% compared to the same period last year, marking a significant turnaround from the previous decline.
Expert Insights
Economist Can Van Luc emphasized that the impact of the Red Sea crisis on Vietnam’s exports remained limited, with consumer prices rising by 3.98% in February. Despite the challenges faced in February, analysts like Darren Tay noted that the fluctuations were expected during the Lunar New Year period, and it was premature to attribute the decline solely to external factors.
