Vietnam had a bumper year in 2024 based on GDP figures alone. Released on Monday, data from the General Office of Statistics, found that the economy had increased in size by 7.09 percent, a significant jump from the 5.05 percent it recorded in 2023. But that’s not to say Vietnam is on a sure footing heading into 2025 (it actually looks more to the contrary) or that everyone was a winner… Read More »

Banking and Finance News

Vietnam credit growth reaches 15.08 percent in 2024

The State Bank of Vietnam’s Deputy Governor Dao Minh Tu has told a press conference that credit growth for 2024 is expected to come in at about 15.08 percent. This is slightly higher than the target of 15 percent set at the beginning of the year. A new credit growth limit for 2025 has been set at 16 percent.

Of note, Thanh Tra has highlighted that the Deputy Governor has said that, inflation permitting (the target for inflation is between 4-4.5 percent), the bank would be willing to allow credit growth to go beyond 16 percent.

This is interesting in that credit growth limits were first introduced just over a decade ago to try to keep bank lending, and by extension inflation, under control, essentially acknowledging that the more money people have to spend the higher inflation will climb. This reality hasn’t changed, however, the connection between inflation and credit growth in Vietnam has, with the former going down this year while the latter has risen.

That is to say, this seems to be abnormal economic behaviour which may indicate that something is amiss.

State Bank continues open market operations

The State Bank of Vietnam has also continued to carry out open market operations. Specifically, there were US$3.26 billion worth of reverse repos outstanding as of close of business January 9 and US$1.59 billion in treasury bills outstanding. Of note, it was reported earlier in the week that the bank would stop selling US dollars on the spot market and instead sell through forward contracts.

Economy news

Vietnam fourth quarter GDP growth comes in at 7.55 percent

Vietnam’s gross domestic product (GDP) in the fourth quarter of 2024 grew by an estimated 7.55 percent compared to the same period in 2023, according to the General Office of Statistics. This marks the highest fourth-quarter growth since 2018, continuing a quarterly upward trend throughout the year with growth of 5.98 percent in Q1, 7.25 percent in Q2, and 7.43 percent in Q3.

For the full year, GDP in 2024 is estimated to come in at 7.09 percent.

Vietnam’s GDP at current prices is estimated at VND 11,511.9 trillion, equivalent to US$476.3 billion with GDP per capita at current prices for 2024 projected to come in at around VND 114 million, or US$4,700, reflecting an increase of US$377 compared to 2023.

These numbers, however, only tell a part of the story with Vietnam’s economy and economic policy far more complicated and nuanced than these GDP figures let on.

Vietnam Business Climate Index records unusual Q4 jump

The European Chamber of Commerce in Vietnam’s Business Confidence Index for the fourth quarter of 2024 has recorded a jump of 15.5 points over the third quarter of the year. It should be noted, however, the number of respondents for each quarterly survey averaged 230 (about 9.08 percent); that number fell to 185 (about 7.1 percent) in the fourth quarter.

With the survey carried out over the last two weeks of the year and that being the Western hemisphere’s Christmas break, it could be that the number of European respondents fell disproportionately to Vietnamese respondents giving the views of the latter more weight.

With this in mind, Vietnamese tend to benefit more from increased FDI than their European counterparts and tend to be very nationalistic which may skew their views to the more positive side.

Furthermore, the report credits the improved optimism to the government restructuring of the ‘organisational apparatus’, however, the report does not make clear how this might impact foreign firms positively.

The point being that these results should be taken with a grain of salt.

Vietnam FDI tally for 2024 comes in at 38.2 billion

In December, Vietnam registered a total of 340 new foreign invested projects with US$7.6 billion in newly registered capital, according to data from Vietnam’s Ministry of Planning and Investment. This represents a 16.44 percent increase in the number of projects compared to November, which recorded 292 new projects and US$4.1 billion in newly registered capital.

Year-to-date, Vietnam has added a total of 3,375 new projects with US$38.2 billion in newly registered capital.

Vietnam’s CPI rises 2.94 percent in December, annual average ends year below target

The consumer price index (CPI) in December 2024 was up by 2.94 percent compared to December 2023, according to the General Office of Statistics. This rise was attributed to adjustments in medical service prices, higher rental housing prices, and increased gasoline prices.

For the full year the average CPI was 3.63 percent compared to 2023 with core inflation rising by 2.71 percent.

Manufacturing news

Vietnam’s industrial production index records strong finish to 2024

Vietnam’s industrial production index rose by 0.8 percent in December 2024 compared to November 2024, according to Vietnam’s Industrial Production Index.

Year-on-year, the index saw a significant increase of 8.8 percent in December 2024 compared to December last year. For the entire year of 2024, cumulative growth stood at 8.4 percent compared to 2023.

Energy news

Vietnam will need 2,400 staff to run proposed nuclear power plant

Vietnam will need up to 2,400 nuclear power plant workers if its current nuclear power ambitions are to be realised, according to Ly Quoc Hung, head of the science and technology department at the Ministry of Industry and Trade. Currently, just 460 Vietnamese have been sent abroad to study nuclear power production and most of these workers are working in unrelated fields.

Furthermore, VN Express has pointed out that a plan was approved in 2010 for the development of human resources in the nuclear power space. This set a target of 2,400 nuclear power engineers by 2020–a deadline now well passed.

This is yet another challenge to add to the list with respect to pursuing nuclear power in Vietnam.

Media news

Vietnam box office revenue reaches record high

Vietnam box office revenue hit VND 4.7 trillion or US$184 million in 2024, according to Box Office Vietnam. It was also reportedly the first time all of the top 10 films for the year grossed over VND 100 billion or US$3.9 million.

Of note, Vietnam has been actively pushing for more films to be produced in the country, particularly foreign films as a means to upskill its own creative workforce. It does, however, impose a number of restrictions on film production that can make it difficult for both domestic and foreign filmmakers alike to produce good quality storytelling in Vietnam.

Real estate news

VinHomes gets ‘-BB’ rating, VinFast connect holding firm back: Fitch Ratings

Fitch Ratings has given Vietnamese real estate developer VinHomes a ‘BB-’ Long-Term Issuer Default Rating with a stable outlook. The ‘BB-’ rating also applies to a proposed US dollar senior unsecured note issue, according to a release from the firm.

The company goes on to point out that the rating might have been higher but for VinHomes’ parent company VinGroup. It says VinGroup has a weaker credit profile due to increasing investments in its other subsidiary, electric car maker, VinFast. These investments are in line with “ambitious growth plans internationally, where competition is intense” which Fitch says it expects to be challenging and to drive ‘cash burn’.

The firm says that as a standalone entity, VinHomes would receive a ‘BB’ rating.

Stock market news

Foreign traders net-sell US$63.1 million

Over the last five trading sessions to the close of business on January 9, foreign investors net-sold US$63.1 million worth of HCMC Stock Exchange stocks. Notably, this is not the best start to the new year and would suggest the mass exodus of foreign investors the exchange saw last year is likely to continue in 2025.

Foreign trader activity, last five trading days

	Buy		Sell		Change
Date	VNDbns	US$	VNDbns	US$	VNDbns	US$
3/1	1,192	$46,961,489	1,928	$75,957,845	-736	-$28,996,356
6/1	1,278	$50,349,650	1,166	$45,937,161	112	$4,412,489
7/1	1,409	$55,510,687	1,501	$59,135,231	-92	-$3,624,544
8/1	1,077	$42,430,809	1,522	$59,962,573	-445	-$17,531,764
9/1	659	$25,962,770	1,099	$43,297,548	-440	-$17,334,778
Total	5,615	$221,215,404	7,216	$284,290,358	-1,601	-$63,074,953

Source: Vietnam Stock Market Tracker

Supplements news

Herbalife Vietnam fined for multi-level marketing regulations violations

Herbalife Vietnam, a multi-level marketing firm in the supplements space, has been fined VND 205 million or US$8,063 for a range of violations including a lack of proper training of new signees, a lack of qualified trainers, and a failure to properly report on its activities.

Herbalife Vietnam, however, was not alone with Vietnamnet noting that Vietnam Link Group and Perfect Global, two other multi-level marketing firms had also been fined for similar violations.

Of interest, at the same time as these revelations were reported, Doanh Nghiep Hoi Nhap, reported the company is sponsoring new years celebrations in Hanoi. It’s not clear if this is connected to the aforementioned fines but if not the timing is excellent.

Tourism news

Full-year Vietnam tourist arrivals reach almost 17.6 million

Vietnam welcomed 1,747,240 international visitors in December, a 2.09 percent increase compared to November, according to Vietnam’s General Department of Tourism.

For 2024, the total number of tourist arrivals reached 17,583,901, representing a 39.5 percent increase compared to 2023.

Transport news

Bold Ride-hailing app has started recruiting drivers in Vietnam

Europe’s Bolt ride-hailing app has started recruiting drivers in Vietnam with the expectation it will start operating in the country at some point in the near future.

Of note, there have been a lot of ride-hailing firms entering the Vietnam market in the last few years. One of the most recent, Xanh SM, which is a home grown firm connected to Vietnamese conglomerate Vingroup, has spent hundreds of millions of dollars buying electric cars from its sister company VinFast which have flooded the streets of most Vietnamese cities.

This looks to be impacting traditional ride-hailing players with Indonesia’s Gojek announcing it would exit the market last year and Grab seeing its market share slip in some key demographics according to Decision Lab’s The Connected Consumer Q3 2024.

With an arguably saturated market it will be interesting to see how easily, if at all, Bolt can gain traction.