The challenges include a spike in shipping costs due to geopolitical conflicts; increasing competition from rivals like China, Indonesia and Thailand; and negative impacts of prolonged high US interest rates on Vietnam's partner countries, leading to a decline in market demand.

In the first seven months, the country’s export turnover reached $266.9 billion—up by 15.7 per cent year on year (YoY). Import turnover stood at $212.9 billion—up by 18.5 per cent.

Moreover, Vietnam's open economy is exposed more to global economic developments, resulting in difficulties for industries like textiles with large export turnover, according to a domestic media report.

The country’s ministry of industry and trade feels though the export market has seen recovery signs, the export recovery of products is still uneven and unstable.

Vietnam's key export items to some major markets are facing pressures from trade defence probes, origin fraud and technical barriers related to the environment, sustainable development and green transformation.

Export-oriented industrial enterprises still face difficulties in expanding and diversifying markets due to high input material costs and compliance costs, especially with new regulations and standards. Lending interest rates are gradually decreasing, but still high.

The ministry will focus on institutional reforms and developing a favourable business environment to support enterprises in restoring production and business, and implementing key projects.

Negotiation on new free trade agreements and upgrading existing ones will be selectively carried out as well.

Fibre2Fashion News Desk (DS)