Vietnam's exports declined 11.6% during the first five months of the year to $136.17 billion, according to the latest government data, as a drop in external demand impacted the economy.

The country's industrial output between January and May fell 2% over the year before, as per a report by the General Statistics Office (GSO), with average consumer prices over the five months up 3.55% from the previous year.

This latest data underscores an economic growth slowdown in the country, predominantly due to muted global demand, Reuters reports.

In addition, Vietnam's imports between January and May declined 17.9% to $126.37 billion compared to the year before, culminating in a trade surplus of $9.8 billion.

The steep decline in imports may signal a further slowdown in industrial production as businesses reduce the purchase of equipment and raw materials.

Earlier this month, Vietnam's Deputy Prime Minister, Le Minh Khai, said the country's economy would be faced with unfavourable external conditions throughout this year.

Vietnam has a growth target of 6.5% in 2023, a slowdown from last year's 8.02% growth. The country's GDP growth decelerated to 3.3% in Q1 from 5.9% growth in Q4 2022.

The Reuters report adds that Oxford Economics slashed its forecast for Vietnam's GDP growth this year to 3.0% from 4.2%.

"We think that easing global growth, including a fading recovery momentum in China, means that the depressing outlook for Vietnam's exports has further to run, casting clouds over the prospect of any rebound in GDP growth," it said.

Furthermore, smartphone exports, Vietnam's largest export earner, declined 16% in the first five months of the year to $21.17 billion, the General Statistics Office added.

This month total exports edged down 5.9% from last year, whilst imports fell 18.4%, the GSO went on to say.