Vietnam's garment exports are facing a substantial decline, with export earnings dropping by 19.3% to $9.6 billion during the January-April period, following a 17.4% decline in the first quarter. This decline can be attributed to reduced consumer spending in major markets and the looming possibility of a recession.

Export Slumps, Japan Provides Hope

Shipments to the U.S. and China have been severely affected, experiencing slumps of over 30%, while exports to Europe fell by 12%. However, there is a glimmer of hope with a 6.6% increase in garment exports to Japan as the country emerges from a technical recession.

The textile and garment industry is a vital component of Vietnam's economy, acting as a major export earner. The decline in earnings from this sector adds extra pressure to the country, which experienced slower economic growth of 3.32% in the first quarter compared to previous years. Local garment and textile manufacturers are grappling with a credit crunch, hindering their access to working capital from commercial banks. This shortage of funds has pushed some companies into a debt repayment crisis.