Vietnam maintains impressive growth despite global gloomy outlook
A number of international financial institutions have recently described Vietnam as an economic bright spot amid a gloomy outlook for the global economy.
According to the International Monetary Fund (IMF), Vietnamese gross domestic product (GDP) is forecast to grow by 7% this year, and this growth can be considered a miracle in the context that one third of the world economies is predicted to experience contraction.
Currently, Vietnamese GDP growth also leads the ASEAN five group that makes up Indonesia, Malaysia, Philippines, Thailand, and Vietnam.
Davide Furceri, economist for the IMF, emphasised that the country continues to be a bright spot in the region moving into the post-pandemic recovery period thanks to its flexible monetary policy, timely fiscal support, and rising demand in the international market in the first half of the year.
Era Dabla-Norris, mission chief of Vietnam and assistant director of the IMF’s Asia and Pacific Department, described the growth trend of the Vietnamese economy as positive amid facing escalating crises of energy, food, and inflation in the world.
Meanwhile, the Wall Street Journal of the United States has published an article, noting that Vietnam is out of step with the rest of Asia in terms of growth, dollar reserves, and monetary policy.
The newswire’s experts stressed that Vietnam has maintained a series of impressive growth indicators amid global concerns including an economic recession, inflation, and rising prices, along with other major uncertainties.
Fitch Ratings, one of the three major international credit rating agencies, highlighted the country as a place boasting strong medium-term growth prospects, low government debt, and an favourable external debt profile.
The financial institution expressed its optimistic view that Vietnamese GDP growth would rise by 7.4% this year, largely thanks to the development of industry, construction, and services. It also noted that foreign direct investment (FDI) continues to be the driving force for strong Vietnamese growth In the medium and long term.
Meanwhile, credit rating agency Moody’s anticipated that the Vietnamese economy would expand 8.5% this year. In September, Moody’s also upgraded the country’s long-term issuer and senior unsecured ratings to Ba2 from Ba3, changing the outlook to stable from positive.
Vietnam makes up the only country in the Asia-Pacific region and is only one of four places in the world to have ratings upgraded by Moody’s since the beginning of the year. This shows that the local economy boasts many strengths and has a great resilience to external macroeconomic shocks which is indicative of improved policy effectiveness.
HCM City serves 2.65 million foreign visitors in 10 months
Ho Chi Minh City welcomed 546,000 international visitors in October this year, lifting the total number of foreign arrivals to the city in the last 10 months to 2.65 million, according to the municipal Department of Tourism.
They have also joined events and fairs to introduce tourism attractions in HCM City to international visitors, including the Asia International Travel Trade Show (ITB Asia) 2022 in Singapore, the Vietnam Tourism and Culture Festival in the Republic of Korea (RoK), and the International and French Travel Market (IFTM) Top Resa in France.
According to Deputy General Director of Vietravel Huynh Phan Phuong Thao, the firm is developing many programmes and products to serve international tourists, especially those from the key markets of Middle East, India and the RoK, in the remaining months of 2022 and the first quarter of 2023.
Hanoi exceeds 10-month target on creating jobs for workers
Hanoi generated jobs for more than 183,000 workers in the first 10 months of this year, equivalent to 114% of the year’s plan and up 34% over the same period in 2021.
According to the socio-economic report of the Hanoi Statistics Office, in the first 10 months of this year, Hanoi has continued to implement solutions to support and promote the labour market towards flexibility and integration.
Order shortfall raises concerns among businesses
HCMC, the nation’s economic center, has seen 51 producers in 17 processing zones and industrial parks reporting an order shortfall, which has forced many of them to resort to mass layoffs.
According to the authority of the processing zones and industrial parks in HCMC, 51 businesses with almost 6,000 workers have suffered from the order shortfall, reported VOV, the national radio station of Vietnam.
The jewelry and high-end products sectors, including garments, footwear and woodwork, are most affected.
The order shortfall is attributed to the Russia-Ukraine military conflict, political, social and security instability, and rising fuel prices.
Green practices recommended to secure sustainable garment export to Canada
An official has advised businesses to adopt green practices to secure sustainable growth in textile and garment export to Canada, where Vietnam ranks second among the exporters of such products.
Data of Canada show that Vietnam exported about 1.2 billion USD worth of textile and garments to the North American market in 2021. The export growth stood at 40.8% during 2018 – 2022. By optimising the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), to which both sides are signatories, the revenue could reach 1.5 billion USD this year.
However, Tran Thu Quynh, Commercial Counsellor and head of Vietnam’s trade office in Canada, said to obtain sustainable export growth, businesses should devise a carbon emission reduction strategy, adopt a circular production model, use recyclable materials and clean energy, and practice energy efficiency.
They also need to stay updated with new certificate systems in the industry and comply with buyers’ report requirements, she told the Vietnam News Agency.
The official noted the trade office is working to advertise Vietnamese companies’ capabilities of sustainable and circular production and introduce the firms with LEED (Leadership in Energy and Environmental Design) certificates to Canadian partners.
Budget collection up 16.2% in 10 months
Vietnam’s budget collection in the first 10 months of this year stood at 1.46 quadrillion VND (58.7 billion USD), surpassing the estimate by 3.7%, and up 16.2% year-on-year, the Ministry of Finance reported.
Domestic revenue rose 12.1% from the same period last year to 1.15 quadrillion VND. Notably, the collection from crude oil reached some 65.5 trillion VND, exceeding the estimate by 32.4% and up 95% year-on-year.
The ministry said the budget collection surpassed the estimate in the period as the country maintained its positive recovery and growth pace, with GDP in the first nine months expanding 8.89%, the highest since 2011.
Moreover, surging oil and gas prices have helped the country earn more from crude oil.
However, the ministry noted that domestic revenue is on a declining trend as the average in the first five months of this year was 130.8 trillion VND, which dropped to nearly 100 trillion VND from June, even only 71.2 trillion VND in September and some 70 trillion VND last month.
Meanwhile, the country’s total budget spending was about 1.2 quadrillion VND, equivalent to 68.3% of the estimate, and up 6% against the corresponding time last year.
Keeping monetary stability – core task in face of FED interest rate hikes
Amid the US Federal Reserve (FED)’s continuous increases of interest rates to cope with inflation, the most important task for Vietnam now is to keep macro-economic stability, with monetary stability being the core, some economic experts have said.
Expert Nguyen Tri Hieu said when FED continues to hike interest rates, exchange rates in Vietnam will also go up accordingly. The USD/VND exchange rate has climbed due to the appreciation of the US dollar, which is favourable for export but unfavourable for import.
Expert Dinh Trong Thinh held that facing the FED moves, the first and foremost thing is to keep macro-economic stability, with monetary stability being the core. If the USD/VND exchange rate is maintained at an appropriate level, core inflation will stay low, thus curbing goods price hikes and ensuring that the consumer price index (CPI) will grow at a slow pace from now to the year’s end and even the following years.
SBV Governor Nguyen Thi Hong said the international situation is causing pressure on not only Vietnam but also all countries around the world. In the recent past, the SBV has made highly proactive and timely response, and thanks to that, the market has seen positive developments and market psychology has been stabilised.
In the time to come, one of the important issues is that the SBV, as well as ministries and sectors, have to stay proactive, increase forecasting and analysis, continually update themselves with new changes so as to ensure proactive governance, and harmoniously coordinate existing policies.
VBSP disburses nearly 8,900 billion VND in preferential capital for economic recovery
The Vietnam Bank for Social Policies (VBSP) held a conference to deploy tasks in the last months of 2022 in Hanoi on July 2.
General Director Duong Quyet Thang said that as of June 30, the Bank for Social Policies had disbursed 8,896 billion VND of preferential loans under the socio-economic recovery and development programme under Resolution No.11, with more than 213,000 borrowers.
In which, loans to support job creation are worth 6,832 billion VND with 142,359 customers; loans for students to buy computers and equipment for online learning 654 billion VND for 65,593 customers. Meanwhile, 1,259 billion VND in loan for renting and buying social housing, housing for workers, building new or renovating and repairing houses according to Decree No. 100/2015/ND-CP of the Government is provided to 4,050 borrowers; and 151 billion VND in loans to non-public preschools and primary schools affected by the COVID-19 pandemic is provided to 1,851 customers.
In addition, in the context of the COVID-19 pandemic, implementing the loan policy for employers facing difficulties due to the COVID-19 pandemic according to Decision No. 23/2021/QD-TTg and Decision No. 33/2021 /QD-TTg, the Bank for Social Policies has actively coordinated with relevant agencies to timely deploy loans to employers to pay wages to employees when they stop working and after recovering production. From the start of implementation to the end of the disbursement on March 31, 2022, 63 provincial and city branches of the bank disbursed 4,787 billion VND to 1,548 employers to pay salaries for more than 1.2 million workers.
Vietnam-Cambodia trade maintains positive growth
Prime Minister Pham Minh Chinh’s official visit to Cambodia from November 8-9 and his attendance at the 40th and 41st ASEAN Summits and related Summits from November 10-13 are expected to help boost bilateral trade cooperation which has reported positive growth over the recent past.
According to the Ministry of Industry and Trade, in the 2016-2020 period, two-way trade recorded an annual average growth rate of 17%, from 2.92 billion USD in 2016 to 5.31 billion USD in 2020.
The turnover surged by 79.1% to 9.54 billion USD last year, and is expected to surpass 11 billion USD this year, as it reached 8.45 billion USD in the first nine months of this year.
Statistics show that to date, Vietnam has 198 valid investment projects in Cambodia with a total registered capital of 2.92 billion USD.
Over 100 Vietnamese firms participate in China Int’l Import Expo 2022
Up to 100 Vietnamese firms are attending the fifth China International Import Expo (CIIE) 2022, which kicked off on November 5 in Shanghai.
This year sees Vietnam among 10 countries invited to open its national booth online.
In the online Vietnamese pavilion roughly 100 enterprises are taking part in the expo with 20 booths showcasing a range of agricultural items, aquatic products, and processed food.
The CIIE 2022 is scheduled to run until November 10. The annual expo is widely considered to be an important trade promotion event ran the Chinese Government with the aim of creating fresh opportunities for all nations to gain access to this large market, especially when the global economy has been heavily impacted by the COVID-19 pandemic.
Liquidity of whole banking system remains good: SBV’s Governor
The liquidity of the whole banking system has remained good, Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong said on Sunday.
The SBV is also willing to provide liquidity to credit institutions, especially at the end of the year when capital demand often peaks, Hong said.
The domestic monetary market last month saw complicated movements with deposit interest rates increasing significantly, hitting more than 10 per cent per year at some banks.
According to Hong, in October, the market was mainly affected by psychological factors and complicated movements of the world economy. Under this context, the SBV promptly provided liquidity to support the banking system.
Hong said the SBV held an emergency meeting last week with credit institutions to discuss liquidity in the banking system. At the event, credit institutions agreed in the current context, they needed to strengthen their solidarity, trust and support for each other for the sake of ensuring the safety of both the entire banking system and each credit institution.
Hong said it is inevitable for Viet Nam’s economy and currency to be affected by adverse impacts of the world market as Viet Nam has integrated deeply into the world economy. Viet Nam, therefore, has to proactively deal with the fluctuations.
Many industry stocks draw foreign capital in October
Many stocks unexpectedly received a large amount of capital inflows from foreign investors, especially some banking stocks, even though the market went down in October.
According to data from the Ho Chi Minh Stock Exchange (HOSE), the total trading value of foreign investors accounted for more than 10.32 per cent, much higher than the 6-8 per cent months ago when the market went down. This number can partly explain the anxiety of individual investors when the market slumped, but the cash flow of foreign investors became more dynamic in the past month.
Statistics show that in October, foreign investors net sold US$81 million on HOSE, however, if Eximbank (EIB)’s sudden put-through transaction is not taken into account, foreign investors net purchased more than VND2 trillion, according to SSI Securities Co.
The inflow of foreign capital in October came mostly from ETFs and active investment funds in the market.
ETFs net bought about $41 million, mainly from Fubon FTSE Viet Nam ETF ($35 million) and VanEck Viet Nam ETF ($6 million). Year-to-date, net inflows from ETFs were $371 million, of which Fubon net bought $288 million, according to SSI.
Similarly, cash flow from active funds was more positive in October. According to SSI’s assessment, active funds disburse more cautiously than ETFs but are more active at the end of the month. The total net inflow was nearly VND700 billion, the highest level since July 2021, and helped narrow the net withdrawal since the beginning of this year to just over VND1.3 trillion.
Hanoi Promotion Month 2022 kicked off
Hanoi Promotion Month 2022 aims to usher in numerous opportunities for consumers to engage in a chain of events with intriguing shopping experience at more than 1,000 stores belonging to businesses, production, and trading units from assorted economic sectors.
The event, launched on November 4 and slated to run until the end of the month, features a chain of eminent promotional events, including the Hanoi Mega Sale fair which will be taking place on November 4-8 at Times City in Hanoi’s Hai Ba Trung district.
The fair encompasses 100 booths introducing and selling a wide assortment of consumer goods such as clothing, cosmetics, and products under the One Commune One Product programme, among others.
Local consumers can experience shopping on-site and online with discounts of up to 50 per cent.
Then, the Golden Promotion Day will take place on November 12 and 13 at 50 supermarkets and commercial centres with promotions from 20 per cent to 50 per cent in direct discounts, gifts, lucky draws, and incentives for non-cash payments.
The Hanoi Tourism Promotion Festival will run from November 18-20 at pedestrian space surrounding Hoan Kiem Lake in the centre of Hanoi, where the 50 participating booths will introduce a number of inbound and outbound tours with attractive discounts from 20 to 50 per cent. Also, the Flash Sale Day will occur on November 27 at MediaMart My Dinh.
EU-Vietnam sustainability cooperation on forum agenda
The Green Economy Forum and Exhibition is expected to look at sustainable solutions in Vietnam to support the country in its net-zero emission path.
Hosted by the European Chamber of Commerce in Vietnam (EuroCham), the event (GEFE 2022) will take place on November 28-30 at Ho Chi Minh City’s THISO SkyHall. It will gather top policymakers, academics, innovators, students, business professionals, and the public together for conferences and a free-of-charge exhibition.
Vietnam’s climate commitments made at the end of 2021 triggered a series of comprehensive policy initiatives implemented across all levels of the government, with the goal of reducing greenhouse gas emissions intensity per unit of GDP and maximising renewable energy production.
Vietnam’s draft Power Development Plan VIII, for instance, calls for $11 billion in additional funding for energy projects until 2030. Likewise, the World Bank recommends that Vietnam invest $368 billion by 2040 to achieve climate resilience.
This is where EuroCham and the European business community can play a critical role, according to chairman Alain Cany, who was a member of the Vietnamese delegation to Glasgow when Prime Minister Pham Minh Chinh made his COP26 commitments.
EuroCham will also launch the Sustainable Innovation Lab at GEFE 2022. Students from leading universities in Vietnam will join forces with businesses to develop solutions to real-world corporate, environmental, and social problems. Mentoring services will be provided by Schoolab, academic institutions, experts, and business professionals to ensure the success of all participants.
Binh Dinh seeks to develop international airport
The provincial government of Binh Dinh has written to the Ministry of Transport proposing developing the Phu Cat airport into an international one.
The upgrade of the airport is necessary as it is overwhelmed, especially on national holidays such as Tet, Nguyen Tu Cong Hoang, vice chairman of Binh Dinh, told Phap Luat Online on November 6.
The Phu Cat airport has a designed capacity of 2.5 million passengers a year, and is expected to serve some five million passengers annually after the expansion.
The provincial government forecast that over 7.5 million tourists will travel to the province in 2025 and the number will soar to 12 million by 2030.
As such, the airport should be expanded and upgraded to handle larger aircraft, better air transport services and boost the province’s tourism sector.
The provincial government proposed expanding the apron from seven aircraft stands to 14, rebuilding the passenger terminal under the public-private partnership format, and developing one more runway using the State budget in the initial stage.
If approved, the province will map out a detailed plan for the airport expansion project and start to mobilize capital, apart from working with the agencies under the Ministry of National Defense to prepare for work on the project.
Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes
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