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Vietnam News Roundup: October 11 to October 17

In case you missed it…

Vietnam’s Economy in Q3 Beyond GDP Growth: Unpacked

Vietnam’s GDP grew by 7.4 percent in the third quarter of 2024 compared to 2023, according to data from the General Office of Statistics. This was higher than expected and bucked an understanding that it might take a hit off the back of Typhoon Yagi. This ostensibly positive news, however, seemed to overshadow another couple of key economic observations… Read More »

Aviation news

Bamboo Airways is resuming international flights

Bamboo Airways is set to resume international flights in November adding a daily flight from Ho Chi Minh City to Bangkok, its first international flight in over a year, The Investor is reporting. This is somewhat of a surprise in that the airline has been struggling for the better part of two years during which it has repeatedly downsized its fleet and the number of routes it serves.

See also: Vietnam’s Airline Industry Turbulence: Unpacked

Vietnam domestic flight numbers fall September on holiday season end

Vietnam’s aviation sector experienced a notable decrease in flight numbers in September 2024, with the total number of flights dropping to 17,720—a 19.57 percent decline from the previous month, according to data from the Civil Aviation Authority of Vietnam. The reduction marks the steepest monthly decline in the year so far, likely reflecting the impact of the off-peak travel season and reduced demand following the summer holiday period.

Vietnam Airlines, one of the country’s largest carriers, operated 7,544 flights in September, while Vietjet ran 7,848 flights, both seeing significant drops from their August numbers. Year to date, the two airlines have executed 83,552 and 83,326 flights, respectively, putting Vietjet just a cat’s whisker away from being Vietnam’s biggest airline in terms of the number of flights undertaken.

That said, it hasn’t been all smooth sailing this year for VietJet with an adverse finding in a UK court likely to weigh heavily on its finances.

See: The VietJet UK Court Ruling for Foreign Firms in Vietnam: Unpacked

Banking and Finance News

Vietnam insurance premium revenue falls .41 percent Jan-Sep 2024

In the first nine months of the year, Vietnam’s total insurance premium revenue reached VND 165.5 trillion or US$6.76 billion, representing a decline of 0.41 percent compared to the same period last year, according to a press release from the Ministry of Finance

Non-life insurance saw relatively strong growth with revenue of VND 58.54 trillion or US$2.39 billion, up 12.79 percent. However, life insurance revenue dropped by 6.4 percent to VND 106.98 trillion or US$4.37 billion.

See also: Insurance in Vietnam: Industry Overview 2024

There were no State Bank open market operations this week

There were no treasury bills or reverse repos issued this week with the last intervention in the currency by the State Bank taking place on October 4. That said, the local currency has been inching up this week. Last Friday, Vietcombank was selling US dollars for VND 24,640 a piece, however, on Thursday it had raised the price to VND 25,030 each, an increase of 1.58 percent

See also: Vietnam Dong Tracker: Daily Updates

Car news

Vietnam car sales jump 50 percent September over August

The Vietnam Automobile Manufacturers’ Association–the VAMA–September sales report has found that vehicle sales of the group’s members jumped significantly in September over August, increasing from 21,408 units to 32,023 units or about 50 percent. The jump was across the board with all key segments recording higher sales.

Year on year sales are also up about 2 percent, on the back of the jump in sales in September. Car imports have also increased averaging 13,820 units a month so far this year which is up from an average of 9,612 in 2023.

Note that the VAMA sales numbers are of members of the organisation only and even then some members do not provide data. With this in mind, this data is only a partial representation of Vietnam’s automotive industry.

See also: Vietnam Car Sales Tracker

Economy news

Vietnam Ministry of Planning and Investment sets 2025 growth target at 7-7.5 percent

Vietnam’s Ministry of Planning and Investment has set a target for GDP growth for Vietnam in 2025 of 7 to 7.5 percent, aiming to become one of the top 33 global economies, Tuoi Tre has reported. The goal includes achieving a GDP of US$500 billion and increasing per capita income to around US$4,900, up from US$4,284 in 2023. The article does not detail the Ministry of Planning and Investment’s rationale for setting this target.

See also: Vietnam’s Economy: Overview

Vietnam needs change in ‘thinking and vision’ for economic development: Economist

Vietnamese economist Tran Dinh Thien, told local news outlet Vietnamnet that Vietnam’s ‘socialist-oriented market economy’ model needs a revamp, with its progress hindered by an over emphasis on the ‘socialist-oriented’ part rather than the ‘market economy’ part.

His key argument is that a market economy is key to advancing socialism in that it provides jobs and subsequently income for workers. However, he says that this is hindered by old-school ways of thinking.

“Agencies try to maintain the discriminatory treatment, protect the ‘ask-and-grant’ scheme and set complicated administrative procedures. The trend of criminalising economic and civil relations distorts the competitive environment, causing many bottlenecks,” he said.

He goes on to suggest that the time is ripe for reform.

“It is now time for Vietnam to renovate, the time to switch to a new way of development. The thinking and vision need changes.”

GDP could take .3 percent hit if Vietnam special consumption tax raised

The Central Institute for Economic Management has projected that GDP in 2026 could take a hit of 0.03 percent as a result of an increase in Vietnam’s special consumption tax on beer, which could rise to between 70 and 80 percent, VN Express has reported.

The article goes on to canvas the opinions of a range of industry groups but there does not appear to be any analysis of the cost savings from a reduction in alcohol related illnesses and road deaths and property damage caused by drunk drivers nor how the funds collected might be redistributed.

See also: What’s Happened to Vietnam’s Beer Market? Unpacked 2024

Vietnam’s economy at risk under Trump, says Fitch Ratings

Vietnam, along with several other Asia-Pacific economies, could face significant economic challenges if Donald Trump secures a second term as U.S. president, with trade protectionism expected to rise sharply, Fitch Ratings has warned. The credit rating agency’s analysis suggests that intensified trade tensions between the U.S. and its partners could lead to a slowdown in Vietnam’s economic growth, potentially reducing the country’s real GDP by more than 1 percent by 2028.

See also: The US Election and Vietnam: Unpacked

Electricity news

Power prices rise an average of 4.8 percent, still below cost

Average electricity prices have increased by 4.8 percent to VND 2,103.1159 per kilowatt-hour, state power provider Electricity Vietnam, or EVN, has announced in a press release. This adjustment is aimed at aligning electricity prices with production costs which have risen by 2.79 percent year on year. This does, however, still not cover costs with the gap between the production cost and regulated retail price, before the adjustment was made, estimated at 6.92 percent.

See also: Electricity in Vietnam for Foreign Investors

Food and beverage news

Beer production in Vietnam climbs 4.5 percent in September over August

Beer and malt production in Vietnam rose by 4.5 percent in September over August, according to Vietnam’s Industrial production Index. This was above the average growth in beverage production which was 1.5 percent month-on-month pulled down by non-alcoholic beverages and mineral water production which was down 3 percent over August.

Beer production is now up 6.7 percent year-on-year, a welcome sign for Vietnam’s beer industry which has been struggling since COVID on the back of a change in consumer behaviour, broader economic challenges that have reduced spending power, an increase in beer imports, and stronger enforcement of drink-driving laws.

For more information see: What’s Happened to Vietnam’s Beer Market? Unpacked 2024

Cost of eating out in Vietnam rises 0.65 percent in September over August

The cost of eating out in Vietnam went up by .65 percent in September over August, according to the General Department of Statistics’ Consumer Price Index data. This was coupled with a year-on-year increase in the cost of eating out of 3.84 percent.

See also: Vietnam’s Food and Beverage Industry 2024

Investment news

Vietnam’s PM asks Japan for ODA support for north-south railway

The Prime Minister of Vietnam, Pham Minh Chinh, has requested overseas development assistance loans from Japanese Prime Minister Shigeru Ishiba, to build the proposed north-south high-speed railway, VN Express is reporting. This comes after the Ministry of Transport announced that it intended to avoid foreign loans to pay for the project in favour of utilising domestic finances.

“With a spirit of independence and self-reliance, the Politburo has decided that we will not depend on foreign loans, as borrowing from any country often comes with strings attached,” Nguyen Danh Huy, Deputy Minister of Transport, told local reporters last week.

See also: Paying For Vietnam’s High-Speed Rail: Unpacked 

Stock market news

Foreign traders net-sell US$88.7 million in HoSE shares

Over the last five trading sessions, to the close of business on October 17, in total, foreign investors had net-sold US$88.7 million worth of HCMC Stock Exchange stocks. This raises the total net-sold from the market by foreign traders this year to US$2.68 billion or US$3.22 billion over the last 12 months.

See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked 2024

Foreign trader activity, last five trading days

Buy Sell Change
Date VND US$ VND US$ VND US$
11/10 1,540 $61,123,216 1,848 $73,347,859 -308 -$12,224,643
14/10 1,046 $41,516,158 1,662 $65,965,445 -616 -$24,449,286
15/10 1,152 $45,723,341 1,728 $68,585,011 -576 -$22,861,670
16/10 1,173 $46,556,839 1,503 $59,654,671 -330 -$13,097,832
17/10 1,383 $54,891,823 1,787 $70,926,745 -404 -$16,034,922
Total 6,294 $249,811,378 8,528 $338,479,731 -2,234 -$88,668,354

*billions

Source: www.hsx.vn 

Trade news

Garment and textile exports down 26.5 percent September over August

Vietnam’s garment and textile exports fell by 26.5 percent in September over August from US$4.1 billion to US$2.98 billion. Vietnam’s garment and textile exports for the year now stand at US$27.3 billion which represents an increase of 8.9 percent over the same period last year.

See also: Vietnam Garment Manufacturing 2024: Quick Guide

Vietnam coffee exports fall 29 percent September over August

Vietnam’s coffee exports fell by 28.66 percent in September over August from US$402.2 million to US$286.9 million. Vietnam’s coffee exports for the year now stand at US$4.3 billion which is an increase of 37.8 percent over the same period last year. That said, Vietnam has seen a decline in the volume of coffee exports of 11.7 percent year-on-year.

See also: Vietnam’s Coffee Industry in 2024: Overview

Australia launches anti dumping probe into steel rebar from Vietnam, others

The Australian Anti-Dumping Commission has announced an anti-dumping probe into reinforced steel bar from Vietnam as well as Indonesia, Malaysia, Thailand, and Turkey. A decision on the investigation should be made early next year.

For Vietnam, the firms included in the investigation are:

  • Hoa Phat Hai Duong Steel Joint Stock Company (Hoa Phat) 
  • Tung Ho Steel Vietnam Corporation Limited (Tung Ho) 
  • VAS Group Nghi Son Joint Stock Company (VAS Group)
  • VAS Group Nghi Son Joint Stock Company (VAS Group) 

This latest investigation is in line with a growing number of antidumping and circumvention investigations on steel products exported from Vietnam.

See also: Can Vietnam Survive the Steel-Trade Wars?

Vietnam footwear exports down 24.6 percent September over August

Vietnam’s footwear exports fell by 24.6 percent in September over August from US$2.08 billion to US$1.57 billion. Footwear exports for the year, however, have reached US$16.54 billion which is an increase of 12.5 percent over the same period last year.

Of note:

  • The United States remains the largest export market, but experienced a significant decline of 31.90 percent in September compared to August.
  • China also shows a steep decline of 45.69 percent, while Japan and South Korea similarly display large drops of 38.42 percent and 44.23 percent respectively.
  • The Netherlands saw a smaller decrease of 7.46 percent, and Belgium experienced a modest increase of 4.69 percent.
  • Italy is the only other major market with a notable increase in exports, up by 8.87 percent.

See also: Vietnam Footwear Manufacturing: Industry Overview 2024

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.

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