Samson: Việt Nam retains positive economic outlook in short-term: World Bank
28th September, 2022
World Bank experts has forecast Việt Nam's economy to grow by 7.2 per Saturday Evening Iraq Economic News Highlights 10-1-22in 2022, the highest growth rate among East Asian and Pacific economies.
According to the East Asia and the Pacific (EAP) Economic Update October 2022 released on September 27, WB experts said the growth will be supported by a strong recovery in domestic demand and continued solid performance by export-oriented manufacturing. However, it would revert to normal rates over the medium-term, with 6.7 per cent for 2023 and 6.5 per cent for 2024.
Việt Nam's inflation rose to 3.1 per cent in July on grounds of higher transport costs, which increased by 15.2 per cent. It is projected to accelerate to 3.8 per cent in 2022 and 4.0 per cent in 2023 due to second-round effects of community price impacts.
Its public debt is estimated at 39.9 per cent of GDP in 2022 and 40.5 per cent for 2023, sustainable and well below the threshold of 60 per cent of GDP set by the National Assembly.
Its poverty is expected to decline from 3.7 per cent in 2021 to 3.3 per cent in 2022. The same goes for lower middle-income poverty, which would fall from 3.7 per cent to 3.4 per cent, before ending up at 3.1 per cent in 2023.
Its public expenditures are likely to speed up in the second half of the year, resulting in a fiscal deficit of 2.8 per cent of GDP in 2022. The deficit is projected to rise to 3.2 per cent next year as the implementation of the 2022-23 support programme picks up.
In the short term, given Việt Nam's ongoing economic recovery and well-controlled inflation, the current accommodative monetary policy remains appropriate whereas a more supportive fiscal policy would hedge against downside risks, including heightened financial risks. However, if inflation overshoots 4.0 per cent and core inflation hikes up, Vietnamese authorities should consider recalibrating monetary and fiscal policies.
Notably, higher financial sector risks would require intensified prudential supervision, reporting and provisioning on NPLs, and improved corporate insolvency and banking sector resolution frameworks.
In the regional scale, three factors could be a hindrance to regional growth beyond the end of 2022, which are global deceleration, rising debt and policy distortions. The growth is projected to slow to 3.2 per cent this year and accelerate to 4.6 per cent in 2023.
The consumer price index has been on the rise in recent months but remained around target ranges in several major economies. Meanwhile, inflationary pressure is building rapidly in other countries, reflecting mounting energy and food prices, as well as idiosyncratic factors.
In most EAP countries, the rise in public debt during the pandemic was driven primarily by an increase in domestic debt. At the same time, private sector debt remains high, especially household debt in China, Malaysia and Thailand.
Poverty in the region is expected to fall thanks to continued recovery from the pandemic. The pace of poverty reduction returned to pre-pandemic levels in 2022 and the number of poor is projected to reach historic lows. LINK
Samson: Việt Nam's GDP up 13.67% in Q3 as manufacturing rebounds
30th September, 2022
Việt Nam's gross domestic product (GDP) expanded 13.67 per cent in the third quarter of this year, helped by a rebound in manufacturing and a lower base than a year ago, the General Statistics Office (GSO) said Thursday.
Business activities in the third quarter saw strong growth, especially compared with the same period last year when several parts of the country were under strict lockdown due to the pandemic, said GSO Director General Nguyễn Thị Hương. In Q3 this year, the agriculture-forestry-fishery sector increased by 3.24 per cent, the industry and construction sector was up 12.91 per cent, while the service sector rose by 18.86 per cent, Hương said.
Regarding GDP use, final consumption expenditure increased by 10.08 per cent over the same period last year; accumulated assets rose by 8.7 per cent; exports of goods and services surged 9.32 per cent, and imports of goods and services were up 2.72 per cent.
With upbeat signs reported in almost all aspects between January and September, the GDP was estimated to rise 8.83 per cent for the period, the highest nine-month growth recorded in 2011-2022, said GSO Director General Nguyễn Thị Hương.
In nine months, the GSO also pointed out that the agro-forestry-fishery sector grew by 2.99 per cent. The industry and construction, meanwhile, increased by 9.44 per cent, and service rose by 10.57 per cent. As for GDP use, final consumption expenditure climbed 7.26 per cent over the same period last year; accumulated assets rose by 5.59 per cent; exports of goods and services up 8.94 per cent and imports of goods and services up 4.74 per cent.
Hương said in the period, ministries, sectors, and localities have drastically implemented the Government's resolutions serving the nation's programme for recovery and socio-economic growth.
As a result, the macro-economy was stabilised, inflation was put under control, major balances ensured, monetary and fiscal policies conducted flexibly and effectively, the business investment environment improved, and social security was guaranteed, she said.
CPI up 3.32 per cent in Q3. The Consumer Price Index (CPI) in the third quarter of 2022 posted a year-on-year rise of 3.32 per cent.
The office said CPI in September increased by 0.4 per cent month-on-month, up 4.01 per cent against December 2021 and up 3.94 per cent compared to the same period last year. GSO General Director Nguyễn Thị Hương attributed the increase in CPI in September to the price of essential consumer goods and services increasing in line with the price of input materials and transportation costs, the continuous hikes in domestic petrol prices in tandem with world fuel prices, as well as rising tuition fees.
On average, in the first nine months, CPI increased by 2.73 per cent over the same period last year; core inflation rose by 1.88 per cent.
The COVID-19 pandemic has been controlled, meaning demand for eating out has increased. The average prices of restaurant services in nine months increased by 4.38 per cent over the same period last year, causing the overall CPI to increase by 0.38 percentage points. Although domestic gas prices fluctuated according to world gas prices, gas prices in nine months rose by 18.75 per cent over the same period last year.
The price of food items in the first nine months of 2022 increased by 0.5 per cent over the same period last year, causing CPI to increase by 0.11 percentage points. In addition, the increase in domestic rice prices in line with the export prices of rice made the prices of rice in the first nine months increase by 1.14 per cent year-on-year, increasing the overall CPI by 0.03 percentage points. However, it wasn't all bad, and CPI across many sectors decreased in the third quarter of 2022, including education service fees which dropped by 1.88 per cent. A number of provinces and centrally-run cities exempt and reduced tuition fees from the first semester of the 2021-2022 school year due to the impact of the COVID-19 pandemic, causing CPI to decrease by 0.1 percentage points.
The domestic gold price fluctuated in the same direction as the world gold prices. As of September 25, 2022, the average world gold price stood at $1,702.79 per ounce, down 4.74 per cent compared to August 2022, when the US tightened monetary policy. Domestically, gold price in September 2022 decreased by 1.71 per cent compared to the previous month, up by 1.34 per cent compared to December 2021, up by 4.06 per cent over the same period last year. LINK
Samson: US businesses interested in cooperating with Việt Nam in energy transition, digital transformation
24th September, 2022
Permanent Deputy Prime Minister Phạm Bình Minh on September 22 met representatives from the US Chamber of Commerce, the Business Council for International Understanding (BCIU), the US-ASEAN Business Council (USABC) and US firms operating in many different areas in New York.
Highlighting the sound economic, trade and investment partnership between the two countries, Minh noted that two-way trade reached nearly US$87 billion in the first eight months of this year, up about 20 per cent year on year.
The US had been the largest export market of Việt Nam, while the latter was also the biggest trade partner of the US among the ASEAN countries, he stressed.
The official affirmed that the Vietnamese Government would continue to create optimal conditions for foreign businesses, including those from the US, to expand their business and invest in Việt Nam in the areas of high technology, digital transformation, green transition, innovation, finance and banking, smart agriculture, renewable energy, infrastructure development and R&D, thus contributing to the country’s efforts in completing commitments announced at the 26th UN Climate Change Conference to achieve net-zero carbon emissions by 2050.
Minh highly valued ideas from US associations and businesses, expressing his hope that they would continue contributing to the promotion of the harmonious and sustainable economic, trade and investment partnership between the two countries.
US representatives hailed efforts by the Vietnamese Government in COVID-19 control and economic recovery as well as maintaining the macro-economic stability, creating confidence for foreign investors to expand their operation in Việt Nam.
US businesses said they were impressed by Vietnamese economic growth amid the complicated pandemic developments, commenting that Việt Nam is a dynamic and potential market as well as one of the attractive Southeast Asian destinations for companies that wish to stabilise and re-establish supply chains.
They welcomed Việt Nam’s efforts in digital transformation, energy transition and climate change response, holding that the country’s development targets are suitable to the common development trend of the world.
Many US firms showed their interest in connecting with Vietnamese partners to seek new cooperation opportunities in the fields of digital transformation, energy transition, as well as their willingness to support Việt Nam in achieving emission reduction and sustainable development goals. LINK
Samson: European enterprises optimistic about Viet Nam’s economy: EuroCham
28th September, 2022
European firms have shown their optimism about the Vietnamese economy, which is recovering strongly after the COVID-19 pandemic, Vice Chairman of the European Chamber of Commerce in Việt Nam (EuroCham) Nguyễn Hải Minh has said.
According to Minh, despite the global supply disruptions induced by the pandemic, Việt Nam still exported more than US$35.1 billion worth of goods to the EU in 2020 and over $40 billion last year. Meanwhile, the Southeast Asian nation imported $14.6 billion and $16.7 billion worth of commodities from the bloc in the two years, respectively.
In the first eight months of this year, Việt Nam’s exports to the EU were valued at $31.9 billion, up 23.6 per cent, resulting in a trade surplus of up to $21.6 billion, a rise of 46.4 per cent.
The figures reflected positive impacts of the EU-Việt Nam Free Trade Agreement (EVFTA), he noted. However, Minh said, European enterprises in Việt Nam said they benefited more from the EVFTA as the country’s export to the EU mainly came from FDI firms.
EuroCham member businesses and even those that have yet to invest in Việt Nam expressed their hope that the EU-Việt Nam Investment Protection Agreement (EVIPA) would soon be approved and take effect, paving the way for European firms to expand investment in the Southeast Asian nation. Minh also cited the Business Climate Index (BCI) released by EuroCham showing that European business stakeholders' confidence in Việt Nam's investment environment declined slightly in the second quarter of this year to 68.8 per cent due to external factors.
Up to 60 per cent of respondents predicted that the Vietnamese economy would stabilise or improve in the third quarter of 2022, 45 per cent were significantly or moderately satisfied with Việt Nam's efforts to attract and retain foreign direct investment (FDI), and 76 per cent expected to increase FDI in the country before the end of the third quarter. 55 per cent of respondents said Việt Nam improved its FDI attraction and retention capabilities since the first quarter.
Regarding the link between green growth and FDI, nearly 90 per cent of respondents said that Việt Nam should increase green economy development to attract more foreign investment.
Minh said apart from the above advantages, Việt Nam’s improved administrative procedures also helped to attract foreign investors, including those from the EU. He also noted that many EU enterprises were still concerned about specialised inspections in Việt Nam, which remain overlapping. LINK