The forecast of the textile and garment export market in the last 4 months of the year and 2023 is quite quiet.

Many disadvantages

According to economic analysts, rising inflation and financial tightening have cast a shadow over the US and European economies, leading to a decline in global demand since the second quarter of 2022.

Inflation in the US and EU is negatively affecting the textile and garment exports of Vietnamese enterprises because these are two traditional markets - accounting for a high proportion of the export structure of this industry.

Pham Xuan Hong, Chairman of the Ho Chi Minh City Textile, Embroidery and Knitting Association commented that although the export turnover of the textile and garment industry has reached US$ 30.1 billion in the first eight months of 2022, the growth mainly falls in the first months of the year. and from July 2022 up to now, the business is facing a lot of difficulties. Many textile and garment enterprises in the Ho Chi Minh City area are experiencing a sharp drop in orders. Declining markets focused on the US and EU because the inflation pressure from these countries was large, forcing consumers to tighten spending, while textiles were not essential goods.

In the EU market, Mr. Pham Van Viet, Chairman of the Board of Directors of Viet Thang Jean Co., Ltd. also admitted that the orders of this business had decreased by over 30% and they were forced to cut working hours to maintain the company's work. core.

Le Tien Truong, Chairman of the Board of Directors of Vietnam National Textile and Garment Group, said that in the first eight months of 2022, Vietnam's textile and garment industry achieved an export turnover of about 30.2 billion USD, an increase of nearly 20% over the same period last year. 2021. This is a growth rate that has not been available for more than 10 years.

“For the first time, we grew 20% in the first 8 months of the year. In particular, in the first eight months of the year, according to data from the General Department of Customs, all imports of raw materials and accessories for the textile and garment industry were only about 13 billion USD after excluding about 1.5 billion USD. accessories for the footwear industry. Thus, the textile and garment industry has generated 17 billion USD, a trade surplus from exports and of this, only about 6.5 billion USD is the salary for workers, the rest is nearly 11 billion USD is the purchase of textiles. raw materials and auxiliary materials in the country. Besides creating turnover, the textile and garment industry also creates motivation to recover many businesses of different types," said Mr. Le Tien Truong.

However, according to Mr. Le Tien Truong, so far, the world's demand has dropped sharply due to the world economic recession and high inflation. In the first 6 months of the year, the US economy's inflation increased to 9% compared to June 2021, but the price of textiles and garments decreased by 9%. Inventories increased significantly.

"If in the first 8 months of the year on average, we can export 3.7 to 3.8 billion USD per month on average, then it is expected that in the last 4 months of the year, we can only export 3.1 to 3.2 billion USD,” said the representative. forecast by Vinatex.

At the same time, because Vietnam's macroeconomy is very stable, the Vietnamese currency has a high value, so compared to the export correlation with countries like India, it decreased by 8%, China, and 9% of the local currency against the USD. Vietnam's export industries lost their price advantages in the context of sudden low world demand.

On the basis of monitoring market movements and forecasts of domestic and foreign experts and organizations, Mr. Le Tien Truong forecast that the last 4 months of 2022 and the trend of 2023 will be quite quiet.

Support from policy

Mr. Le Tien Truong, Chairman of the Board of Directors of Vietnam Textile and Garment Group, said that businesses are facing difficulties in applying policies into practice. Specifically, currently, if imported raw materials are used for processing, they are exempt from import tax, but if buying domestic goods for export production, they must both pay VAT and prepare both import tax of this type of goods. materials that, when exported, will be refunded. Thus, on average, enterprises have to add about 24% of the value to purchase domestic raw materials.