Garment and footwear exports in Vietnam are facing challenges due to rising inflation and economic recession in major global markets. Data from the General Department of Customs shows, Vietnam experienced a 12.9 per cent decline in garment exports, amounting to $27.7 billion, and an 18.3 per cent decrease in footwear exports, totaling $16.4 billion, in the first ten months of the current year.
In October 2023, Vietnam's garment shipments saw a marginal month-on-month decline of 0.1per cent to $2.57 billion. Despite this, Duong Thuy Linh, Deputy General Secretary of the Vietnam Cotton and Spinning Association (VCOSA), believes this decline is not unique to Vietnam, as global exports are also witnessing a downturn due to a decrease in demand worldwide. The overall exports decrease has led several textile companies to adjust their production targets, scaling down to 50-80per cent of their original capacity. However, Linh notes production capacities have shown a slight improvement since July of this year.
VCOSA predicts low consumption will continue to impact Vietnam's textile and garment industry in 2024, anticipating a 10 per cent drop in exports to $40 billion during the year. The consumer price index (CPI) for 2023, estimated between 3.2per cent and 3.6per cent, is expected to stabilize inflation, maintain people's income levels, and prevent excessive tightening of purses.
Despite these challenges, Vietnam's GDP growth for the year is projected at 5per cent, with the garment industry benefiting from new-generation free-trade agreements (FTAs) signed with other markets. Compliance with international standards such as the Global Recycle Standard, Oeko-Tex, and BCI by industry players, along with the shift to organic cotton, natural fibers, and renewable energy, is anticipated to contribute to the growth of the industry, according to Linh.
Economic expert Huynh Thanh Dien emphasizes the importance of enterprises embracing sustainability development standards to capitalize on these opportunities.
