Vietnam News Roundup: March 29 to April 4

Manufacturing news

Vietnam’s manufacturing industry records slight decline in March

S&P Global’s Purchasing Manager’s Index recorded a fall for Vietnam’s manufacturing sector in March, with the index dipping below the 50-point break-even mark. At 49.9 points this was a half-point drop from February’s 50.4.

Key takeaways

• Optimism in the industry for the year was at an 18-month high;
• There was a fall in new orders;
• New export orders were down due to competition and geopolitical challenges;
• The fall was was isolated to intermediate goods firms whereas consumer and investment goods producers recorded increases;
• New hires were up;
• Lower orders led to a reduction in the import of raw materials and a decrease in input stocks;
• There was a significant fall in stocks of finished goods; and
• Selling prices reduced.

Vietnam’s Industrial Production Index jumps 20 percent in March

Vietnam’s Industrial Production Index–or IIP–was up 20 percent in March over February according to Vietnam’s General Office of Statistics. Notably, the IIP saw an 18 percent fall in February as a result of the Lunar New Year holiday and in this context these latest results seem to indicate a rebalancing.

The biggest gains in March were in:

• Other common machines, up 102.7;
• Lifting, lowering and loading equipment, up 94.9;
• Manufacture of other specialised machines, up 68.9; and
• Machinery and equipment not classified elsewhere, up 63.3.

The biggest falls were in:

• Plastic and synthetic rubber in primary forms, down 38.8;
• Refined petroleum products, down 10.9;
• Coke and refined petroleum products 10.4; and
• Chemicals and chemical products, down 6.1.

Energy news

The Power Development Plan 8 implementation plan was approved

The Prime Minister issued Decision 262/QD-TTg on April 1 approving an implementation plan put together by the Ministry of Industry and Trade, for the implementation of the Power Development Plan 8–or PDP8–that was approved last year. It essentially goes into the specifics dividing power production aims by region and then listing specific projects.

Of note, there are no specific offshore wind projects listed in the plan. This is despite 6  megawatts of offshore wind planned for in the PDP8 by 2030. With wind power projects taking up to 12 years to complete, it looks a lot like the offshore wind target outlined in the PDP8, just a year after its approval, is already out of reach.

Aviation news

Vietnam’s legal argument for not returning four ex-Vietjet planes

This analysis of a dispute between foreign aircraft lessor, Fitzwalter Capital Partners, and Vietnam’s Vietjet, in which Vietjet failed to return four planes after a lease agreement was terminated, goes into the legal argument for keeping the aircraft in Vietnam.

Specifically, the article states that when the ownership of the lease was transferred and the aircraft were re-registered in Guernsey as opposed to Vietnam, it removed them from the Civil Aviation Authority of Vietnam’s jurisdiction–the CAAV. This meant that the CAAV could not issue an export licence and without one the aircraft cannot leave Vietnam legally.

On a side note, this article doesn’t mention Vietjet by name and spends a good deal of time suggesting there may have been nefarious motives behind the change of ownership of the original lease by its financiers. It does not, however, make any specific claims but rather asks very broad, vague questions.

Wages news

Average wages in Vietnam jump 4.11 percent

The General Office of Statistics has released wage data for the first quarter of 2024. The average monthly wage across the whole economy reached VND 7,600,000 or US$305 a jump of 4.11 percent from VND 7,300,000 in the fourth quarter of 2023. This was the biggest jump since the start of 2023.

Vietnam average wage, Q1 2023 to Q1 2024 

See also: Average Salary in Vietnam 2024: Quick Guide 

Currency news

Vietnam’s foreign reserves on table if VND decline continues: SBV Deputy Governor

Banks were selling US dollars for upwards of 25,000 Vietnamese dong a piece on Thursday, the most a single US dollar has been able to buy ever, according to VN Express. In response, the Deputy Governor of the State Bank of Vietnam (SBV), Dao Minh Tu, has said that the central bank will intervene if the dong continues to slide making specific mention of Vietnam’s foreign currency reserves he says are around US$100 billion.

Note that the SBV has issued just over US$6.9 billion in treasury bills to try to relieve some of the pressure on the local currency over the last few weeks, but that pressure has persisted. Said treasury bills will also start to mature next week with trillions of dong set to return to the market.

T-Bills issued by State Bank top US$7.2 billion

The State Bank of Vietnam has continued to issue treasury bills to prop up the local currency. There are currently US$7.2 billion worth of T-bills as of close of business April 4.

Outstanding T-bills

Stock market news

Foreign traders net-withdraw over US$470 million from HoSE in March

Foreign traders pulled almost half a billion dollars from the Ho Chi Minh City Stock Exchange–the HoSE–in March. This adds to the US$110 million withdrawn in February after a net-gain in January of just over US$7 million. All-up, so far this year, foreign traders have net-withdrawn US$644.3 million from the local market.

Foreign trader activity, March 2024

The week ahead

Detailed customs data for March should be released Wednesday by Vietnam’s General Department of Customs. With exports the backbone of Vietnam’s economy, and the Lunar New Year, and the anomalies it creates in economic data sets, well and truly in the rear-view mirror, this should provide a clearer picture of how Vietnam’s economy is actually faring moving through 2024.

Vietnam is a dynamic market that is changing rapidly. To keep up-to-date with the business environment and how it is evolving make sure to subscribe to the-shiv.