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Does Vietnam Have a Private Consumption Problem Too?
When reports of a private consumption problem in China surfaced, it made sense to wonder if Vietnam might be facing those same problems too. And indeed, whereas it’s fairly easy to assume that Vietnam’s booming economy might correlate to booming consumer consumption, the numbers paint a somewhat different picture… Read More »
Banking and Finance News
State Bank continues open market operations
The State Bank of Vietnam has continued to intervene in the currency market with US$1.76 billion in treasury bills outstanding as of the close of business Thursday. There were also reverse repurchase agreements outstanding to the tune of US$1.97 billion.
See also: The Vietnamese Dong’s Wild Ride: Unpacked
Economy news
Vietnam’s CPI records slight fall in November
The Consumer Price Index (CPI) in Vietnam decreased by 0.12 percent in November compared to October, according to Vietnam’s General Statistics Office. The CPI for November stood at 2.77 percent down from 2.89 percent in October.
Vietnam’s CPI has fallen markedly since its mid-year peak at 4.36 percent. That said, it’s worth noting that price changes have been inconsistent. For example, utilities’ prices rose .87 percent in November, however, transport (airfares and cars), some food products (pork, and fresh, dried and processed vegetables), and post and telecommunications (phones and tablets), all recorded falling prices–.07 percent, .22 percent, and .3 percent, respectively.
Investment news
Vietnam adds US$4.1 billion in registered capital to 2024 FDI tally
In November, Vietnam registered a total of 292 new foreign direct investment projects with US$4.1 billion in newly registered capital, according to Vietnam’s Ministry of Planning and Investment. This represents a 16.33 percent increase compared to October, which recorded 251 new projects and US$2.48 billion in newly registered capital.
Year-to-date (YTD), Vietnam has now recorded 3,035 new projects with US$31.4 billion in newly registered capital. This has mostly been in manufacturing and processing.
See also: Vietnam FDI Source Country Tracker
Manufacturing news
Vietnam’s industrial production index jumps 2.29 percent in November
Vietnam’s Industrial Production Index (IPI) increased by 2.29 percent in November compared to October, reflecting sustained industrial activity, according to Vietnam’s General Statistics Office. Year-on-year, the IPI has risen by 8.94 percent compared to November 2023.
Indeed, Vietnam’s manufacturing sector has bounced back significantly after a tumultuous 2023 which is reflected in significant increases in both imports and exports (data below). It’s also seen a significant jump in GDP growth. That said, this growth has not been consistent across the economy and there are still a number of sectors, real estate in particular, where the picture is not quite so rosy.
See also: Vietnam’s Economy in Q3 Beyond GDP Growth: Unpacked
Legal news
Vietnam’s vape ban hits a nerve with pro-vaping group
Vietnam has passed a law banning vapes and vaping. The law is set to come into effect from next year.
Of note, Vaping360 a vaping retailer and pro-vape website has covered this issue in a somewhat aggressive op-ed. But whereas the tone and wording might be a smidge hyperbolic it does raise a good point in that Vietnam has one of highest smoking rates in the world and therefore banning a less-harmful alternative does seem counterproductive.
It also goes on to suggest that the ban was implemented to protect the profits of Vinataba, Vietnam’s state-owned tobacco firm.
On that note, this week Vinataba issued a press release in which it announced several key achievements for the year so far, including an increase in its market share of 2 percent and VND 13 trillion or US$512.5 million paid in taxes. It also lists several challenges facing the tobacco industry including cigarette smuggling and “illegal new-generation cigarettes (READ: vapes), affecting the consumption of traditional cigarettes and causing losses to the state budget.”
Technology news
NVIDIA to buy Vietnam’s VinBrain
NVIDIA has announced it intends to buy Vietnam healthtech firm VinBrain. The value of the deal has not been disclosed. VinBrain will reportedly be used as the foundation for an NVIDIA research and development centre in Vietnam.
Whereas this has been heralded as a coup for Vietnam’s tech sector–VietnamBiz suggests that it shows Vietnam has become a ‘promised land’ for global tech firms–it’s difficult to know exactly what this might mean on a practical level at this point in time.
Of note, Art Times has looked at VinBrains financials noting that about VND 627 billion or US$24.7 million has been invested in the business since its inception. It also notes that VinGroup currently owns about half of the company and recorded a loss on said holding in the third quarter of 2024 of VND 16 billion or about US$630,728. Based on these numbers the firm looks to be relatively small.
On this line of thought, Zing News seems sceptical of any broad new job creation but rather suggests the benefits will be in the quality of the positions created.
“Even if Nvidia’s data centre itself doesn’t directly create many jobs, the positions it will fill will be highly skilled, requiring scientists with degrees and research backgrounds,” it has said.
Also worthy of a mention is that Vietnam is in the process of developing legislation in response to the Global Minimum Tax to provide alternative incentives to tax breaks for foreign firms. The centrepiece of this legislation looks to be a research and development fund to which foreign firms can contribute a certain amount each year of their profits before tax. It’s not clear that this connects to the purchase of VinBrain but it would make sense if it did.
Tourism news
Vietnam tourist arrivals were up 20.54 percent in November
Vietnam welcomed 1,711,512 international tourists in November, representing a month-on-month increase of 291,679 visitors or 20.54 percent, according to Vietnam’s General Department of Tourism.
Year-to-date, the country has recorded 15,836,661 arrivals. This is just 2.83 percent below the 16,298,423 arrivals Vietnam had received by the end of November in 2019.
Also from the same year-to-date data:
- China accounted for 32.20 percent of Vietnam’s tourist arrivals in 2019. In 2024, that number has fallen to 21.16 percent.
- South Korea has now lead-frogged China to be Vietnam’s biggest source of foreign tourists accounting for 26.1 percent of tourist arrivals this year.
- Russia, which was the sixth biggest source market for tourists in 2019 has fallen to 18th, from accounting for 3.59 percent of arrivals to just 1.29 percent.
See also: Tourism Industry in Vietnam
Stock market news
Foreign traders continue to exit market, net-sell US$29.5 million
Over the last five trading sessions to the close of business on December 12, foreign investors net-sold US$29.5 million worth of HCMC Stock Exchange stocks. This was in line with months of mass withdrawals from the exchange by foreign investors. Specifically, foreign traders this year have net-sold just shy of US$3.52 billion or nearly US$3.75 billion since the same time last year.
See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked
Foreign trader activity, last five trading days
| Buy | Sell | Change | ||||
| Date | VNDbns | US$ | VNDbns | US$ | VNDbns | US$ |
| 6/12 | 2,391 | $94,148,733 | 2,033 | $80,052,018 | 358 | $14,096,715 |
| 9/12 | 1,001 | $39,415,676 | 1,482 | $58,355,677 | -481 | -$18,940,000 |
| 10/12 | 1,059 | $41,699,502 | 1,194 | $47,015,302 | -135 | -$5,315,801 |
| 11/12 | 1,462 | $57,568,151 | 1,658 | $65,285,905 | -196 | -$7,717,755 |
| 12/12 | 1,139 | $44,849,606 | 1,434 | $56,465,614 | -295 | -$11,616,009 |
| Total | 7,052 | $277,681,668 | 7,801 | $307,174,516 | -749 | -$29,492,849 |
Source: Vietnam Stock Market Tracker
Trade news
November imports-exports fall in line with Christmas demand
The busiest time of the year for Vietnam’s export sector has come to an end with a month-on-month decline in exports and imports recorded in November, according to the latest data from Vietnam’s General Department of Customs. This is fairly standard this time of year as the Christmas holiday draws closer. Notably, imports and exports are both still up significantly year-on-year.
Imports-Exports Vietnam, November
| November | MoM | YTD | YoY | |
| Exports | 33,733,773,009 | -5.3 | 369,934,689,621 | 14.4 |
| Imports | 32,667,246,020 | -2.8 | 345,622,247,848 | 16.4 |
| Two Way Trade | 66,401,019,029 | 715,556,937,469 | ||
| Trade Balance | 1,066,526,989 | 24,312,441,773 |
Imports-Exports FDI Enterprises, November
| November | MoM | YTD | YoY | |
| Exports | 23,790,276,295 | -5.8 | 264,432,613,031 | 12.6 |
| Imports | 20,291,716,149 | -3.0 | 219,566,261,040 | 15.2 |
| Two Way Trade | 44,081,992,444 | 483,998,874,071 | ||
| Trade Balance | 3,498,560,146 | 44,866,351,991 |
The week ahead
There are a handful of events coming up this week. For more information see the: Doing Business in Vietnam: Events Directory 2024
Also, Vietnam is a dynamic market that is changing rapidly. To keep updated to date with the business environment and how it is evolving make sure to subscribe to the-shiv.