Typhoon Yagi Devastates Northern Vietnam
Typhoon Yagi, the most powerful storm to strike Vietnam in over three decades, has caused widespread destruction across northern Vietnam, significantly affecting 26 localities that account for 41% of the nation’s GDP and 40% of its population, resulting in considerable harm to lives and a substantial economic impact.
According to the latest report from the Government of Vietnam, economic damages from Typhoon Yagi are estimated at VND 81.5 trillion (US$3.31 billion), exceeding previous estimates of VND 61 trillion (US$2.5 billion). Japan’s Mitsubishi UFJ Financial Group (MUFG) has forecast that the typhoon could reduce Vietnam’s GDP growth in 2024 by 0.2-0.5 percentage points.
The storm significantly disrupted factory activity in September, resulting in temporary business closures and delays in production. About 50-60% of factories in the North experienced flooding, 30-40% sustained roof damage, and 10-15% faced structural collapse. Fourteen incidents on 500 kV power lines and numerous other disruptions resulted in power outages for 80-90% of businesses, leaving over 6 million customers without electricity and affecting more than 430 industrial zones and clusters. As a result, manufacturing output sharply declined, breaking a five-month streak of expansion. The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) dropped to 47.3 in September from 52.4 in August, marking the sharpest decline since November of the previous year.
Among the hardest-hit provinces, Quang Ninh suffered the highest economic losses at VND 24.8 trillion (US$1 billion), followed by Hai Phong at VND 12.2 trillion (US$508 million), Hai Duong at VND 7.4 trillion (US$308 million), as well as Lao Cai, Yen Bai, Bac Giang, and Hung Yen—many of which are key industrial hubs in Vietnam. Hai Phong, one of Vietnam’s critical industrial centers, saw 80% of factories in the DEEP C industrial zones damaged, leading to widespread production halts in electronics, machinery, and other key sectors. Quang Ninh also faced significant disruptions, with major companies like Jinko Solar and LG Electronics reporting delays due to power outages and flooding.
The agricultural sector has also been severely impacted, with agricultural damages amounting to over VND 30.8 trillion (US$1.28 billion), accounting for 38% of the total economic loss. Approximately 284,400 hectares of rice paddies and 61,100 hectares of crops were submerged or damaged, and over 5.6 million poultry perished.
Despite the challenges posed by Typhoon Yagi, the outlook for Vietnam’s economic growth in 2024 remains strong, with GDP growth still projected to be in the range of 6% to 6.5%. HSBC maintains its forecast at 6.5% while ADB has also kept its forecast unchanged at 6% this year. Economists pointed out that the underlying demand remains favorable to growth, suggesting a potential quick rebound as recovery efforts commence.
