On Thursday, Vietnam and the European Union marked the fourth anniversary of the European Union Vietnam Free Trade Agreement or the EVFTA for short. This agreement has brought down tariff barriers and boosted trade but it hasn’t been without its challenges, some of which still persist. This article looks at how this landmark agreement has been implemented, the challenges it has faced, and the challenges it still faces. Read More »

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Banking and Finance News

Vietnam credit growth reaches 6 percent to June

Credit growth in Vietnam hit 6 percent in the first six months of the year, according to the State Bank’s Deputy Governor Dao Minh Tu. This is a significant improvement over the same time last year when it had reached just 1.46 percent. It is, however, still a long way from the 14 percent target set at the beginning of the year.

State Bank outstanding treasury bills hit US$3.6 billion

The State Bank of Vietnam has continued to issue treasury bills to suck up excess liquidity in the economy. There are currently US$3.6 billion worth of T-bills outstanding as of the close of business on August 1. Also of note is that the State Bank has outstanding loans to local banks to the tune of US$1.5 billion.

Outstanding loans

Issued	Length	Maturing	VND (billions)	US$	% p.a.
25-Jul	7	1-Aug	8,000	$317,145,204	4.50
26-Jul	7	2-Aug	12,343	$489,317,207	4.50
29-Jul	7	5-Aug	4,911	$194,706,784	4.50
30-Jul	7	6-Aug	3,663	$145,229,692	4.50
31-Jul	7	7-Aug	3,053	$121,024,347	4.50
31-Jul	7	7-Aug	6,000	$237,858,804	4.50
Total			37,971	1,505,282,036

*billions

Outstanding T-bills

Issued	Days	Maturing	VND	US$	% p.a.
18-Jul	14	1-Aug	17,100	$677,898,720	4.50
19-Jul	14	2-Aug	5,750	$227,948,400	4.50
22-Jul	14	5-Aug	3,850	$152,626,320	4.50
23-Jul	14	6-Aug	3,950	$156,590,640	4.50
24-Jul	14	7-Aug	1,600	$63,429,120	4.50
25-Jul	14	8-Aug	1,300	$51,536,160	4.50
26-Jul	14	9-Aug	5,500	$218,037,600	4.50
29-Jul	14	12-Aug	10,850	$430,128,720	4.50
30-Jul	14	13-Aug	22,050	$874,132,560	4.50
31-Jul	14	14-Aug	9,600	$380,574,720	4.50
31-Jul	14	14-Aug	9,400	$372,646,080	4.50
Total			90,950	$3,605,549,040

*billions

Economy news

Vietnam’s Consumer Price Index hits 4.36 percent in June

Vietnam’s Consumer Price Index was up in July to 4.36 percent over a year ago. This is still relatively high in the context of an inflation target for the year of between 4 and 4.5 percent. The biggest gains were in food, medical services, and educational services; with only post and telecommunications recording a decline.

FDI data by sector: July Update

Vietnam added another 278 foreign direct invested projects to its 2024 tally in July, along with just over US$2.8 billion in additional capital commitments, according to data from Vietnam’s Ministry of Planning and Investment. The biggest gains were in manufacturing and processing which added 96 new projects and US$1.97 billion.

FDI data by country: July Update

Singapore is the leading foreign direct investor in Vietnam for this year initiating 36 new projects and registering US$6.5 billion in capital. The tiny island state leads with almost three times the registered capital of second-place Hong Kong, according to data from the Ministry of Planning and Investment.

Energy news

Deputy PM pushes for greater grid feed-in allowances for rooftop solar

Vietnam’s Deputy Prime Minister Tran Hong Ha has asked the Ministry of Industry and Trade to look at increasing the volume of excess rooftop solar that the state power provider will buy from private installations to 20 percent, VN Express has reported. This is up from 10 percent outlined in the current draft decree on rooftop solar.

Land news

Vietnam land values set for big jump as new Law on Land takes effect

Land values in Vietnam’s Ho Chi Minh City could jump by up to 51 times their current values if new draft land prices for the city are approved next month, Tuoi Tre has reported. Already pricey areas of HCMC would also jump by up to five times with high-end shopping strip Dong Khoi Street set to command up to VND 810 million, or US$32,000 per square metre.

Manufacturing news

Nintendo Switch gaming consoles to be made in northern Vietnam

Foxconn, a Taiwanese electronics giant, plans to manufacture Nintendo Switch gaming consoles in the northern province of Quang Ninh as part of a US$263.7 million investment. The facility is expected to start official production in January 2027, with an annual output of 4.18 million units.

This investment aligns with a broader trend of Taiwanese manufacturers diversifying their supply chains by expanding operations in ASEAN, especially into Vietnam. In addition to Foxconn, other Taiwanese electronics giants such as Pegatron, Compal, and Wistron have also established manufacturing facilities in the country.

Vietnam’s PMI remains steady at 54.7: S&P Global

S&P Global’s Vietnam Purchasing Managers’ Index recorded 54.7 points in July which was the same as for June. S&P Global says this was on the back of a ‘substantial rise’ in new orders. It does, however, note that to fulfil these orders firms relied largely on finished goods already on hand as opposed to new imports. Of note, Vietnam’s trade surplus in July was US$2.12 billion, according to the General Office of Statistics.

Key takeaways

There were improvements in consumer, intermediate and investment goods;
Purchase stocks decreased for the eleventh month in a row;
High inflation and increased shipping costs saw input costs rise sharply; and
Selling prices increased for the third month in a row.

Note that, the index is out of 100 with 50 being break-even and anything below that signalling a contraction with anything above signalling an expansion.

Media news

Olympics kicks off but Vietnam won’t be watching with no broadcast rights

The Olympics have kicked off but will not air in Vietnam with none of the country’s television stations fronting up for the broadcasting rights, Lao Dong has reported. This makes Vietnam one of an estimated 67 countries out of 195 that have foregone buying the rights to broadcast the global sports carnival.

Mining news

Vietnam rare earth mining gets boost with Korea, US partnership announcement

South Korea’s Trident Global Holdings and US firm Zoetic Global have announced they are partnering up to develop several rare earth mines in northern Vietnam. This will be done in collaboration with Vietnam’s Hung Hai Group which owns three mines already.

Of note, the US Geological Survey’s Mineral Commodity Summaries 2024 estimated Vietnam’s rare earth reserves to be in the vicinity of 22 million tons. China, which has the largest reserves, for comparison, is estimated to have double that at 44 million tons, and Brazil which comes in third place has roughly 21 million tons.

Stock market news

Foreign traders net withdraw US$30 million from local bourse

Foreign traders have continued to sell down their positions in the Ho Chi Minh City Stock Exchange. In total, just over US$30 million was withdrawn from the market over the last five trading sessions to the close of business on August 1. This brings the total net withdrawn from the market by foreign traders to just over US$2.4 billion so far this year.

Foreign trader activity, last five trading days

	Buy		Sell		Change
Date	VND*	US$	VND*	US$	VND*	US$
26/7	1,957	$77,581,742	1,569	$62,200,181	388	$15,381,562
29/7	894	$35,441,021	1,117	$44,281,454	-223	-$8,840,434
30/7	1,288	$51,060,442	1,596	$63,270,547	-308	-$12,210,106
31/7	1,980	$78,493,536	2,654	$105,213,053	-674	-$26,719,517
1/8	2,481	$98,354,779	2,422	$96,015,830	59	$2,338,949
Total	8,600	$340,931,520	9,358	$370,981,066	-758	-$30,049,546

*billions

Source: www.hsx.vn

Tourism news

Vietnam foreign tourist arrivals continue decline in July

Vietnam welcomed 1.15 million tourist arrivals in July, a fall over June of 7.83 percent and 16.79 percent over May. The biggest falls were in Asia, which fell by 11.7 percent mainly due to falls from Singapore down 48.29 percent, Thailand down 27.64 percent, and India down 24.86 percent.

Trade news

Dumping complaint received by European Commission RE: Vietnamese steel

The European Commission has notified Vietnam’s Ministry of Industry and Trade that it has received an official dumping complaint against some steel products from Vietnam, Tuoi Tre has reported. Specifically, the review will look at non-alloy or alloy hot-rolled steel coils or HRC.

Of note, Vietnam has launched its own anti-dumping investigation into HRC from China. This is on the back of a flood of cheap steel into the country. As of the end of June, Chinese iron and steel imports into Vietnam totalled US$3.7 billion with a further US$2.1 billion worth of iron and steel products.

The week ahead

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.

Of note: If you’re interested in a more in depth assessment of this or anything to do with the business environment in Vietnam, I do take commissions and I am always open to collaborate. You can reach me on LinkedIn – Mark

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