Review of economic information for the week of October 21 - 25

The central exchange rate increased by 42 VND, VN-Index decreased by 32.74 points compared to the previous weekend or the assessment of the economic situation in the first 9 months, the Government said that the socio-economic situation next month is more positive than the previous month, the next quarter is higher than the previous quarter... are some notable economic information in the week from October 21 to 25.

Economic news review

Overview

On October 21, the Government presented to the National Assembly the results of the implementation of the 2024 socio-economic development plan and the projected 2025 socio-economic development plan.

In 2024, the Government has focused on prioritizing growth, renewing traditional growth drivers (investment, consumption, export), strongly promoting new growth drivers (digital economy, green economy, circular economy, etc.), associated with maintaining macroeconomic stability, controlling inflation, and ensuring major balances of the economy.

Assessing the economic situation in the first 9 months of 2024, the Government said that the socio-economic situation in the following month is more positive than the previous month, the following quarter is higher than the previous quarter (GDP in the first quarter increased by 5.87%, in the second quarter increased by 7.09%, in the third quarter increased by 7.4%), the 9 months achieved many important results, higher than the same period in most areas. It is estimated that 14/15 targets for the whole year will be achieved and exceeded (GDP per capita target will be achieved if GDP growth is over 7%).

Specifically, the country's GDP growth in the first 9 months reached 6.82%, estimated at 6.8 - 7% for the whole year, higher than the target assigned by the National Assembly (6 - 6.5%), belonging to the group of countries with high growth rates in the region and the world, highly appreciated by many large and prestigious international organizations (WB forecasts Vietnam to grow by 6.1% in 2024, HSBC forecasts an increase of 6.5%, ADB forecasts an increase of 6%, IMF forecasts an increase of 6.1%). The average CPI in the first 9 months increased by 3.88% (in the context of high salary increases from July 1, 2024); estimated for the whole year at about 4 - 4.5% (in line with the target assigned by the National Assembly).

The foreign exchange market is basically stable, interest rates are down (average lending rates of commercial banks decreased by 0.86% compared to the end of 2023). State budget revenue in the first 9 months reached 85.1% of the estimate, up 17.9% over the same period, while it is estimated that nearly 200 trillion VND of taxes, fees, charges, and land rents will be exempted, reduced, and extended for the whole year. Import-export turnover in the first 9 months reached 578.5 billion USD, up 16.3% over the same period in 2023; trade surplus of nearly 20.8 billion USD; in the whole year of 2024, the total import-export turnover is estimated to reach over 800 billion USD, the highest ever.

Development investment has achieved positive results. By September 30, 2024, ministries, agencies and localities have allocated VND 664.9 trillion in detail, reaching 98.1% of the plan. The Government has submitted to the National Assembly Standing Committee for consideration the adjustment of VND 8.4 trillion from ministries, branches and localities that have not allocated or disbursed to other ministries, branches and localities. Estimated payment by September 30, 2024 is 47.29% of the plan assigned by the Prime Minister. Attracting foreign investment is a bright spot when in 9 months it reached 24.78 billion USD, up 11.6%, the highest in many years, while global investment decreased; Disbursement in 9 months reached 17.3 billion USD, up 8.9% over the same period in 2023. It is estimated that foreign investment attraction for the whole year will reach 39 - 40 billion USD, and realized foreign investment capital is estimated at 23 billion USD.

The economic structure has shifted positively towards developing the digital economy and green economy, increasing the proportion of the industrial, construction and service sectors, and reducing the proportion of the agricultural sector (the industrial, construction and service sectors account for 79.9%; the agricultural, forestry and fishery sectors are only 11.64%). Industry has recovered positively, is an important driving force, leading growth (in the first 9 months, the added value of the industrial and construction sectors increased by 8.34%, of which the manufacturing and processing industry is a bright spot with an increase of 9.76%). Services have maintained a good recovery momentum (in the first 9 months, the service sector increased by 6.95%); e-commerce and tourism have developed strongly (e-commerce revenue in 2024 is estimated at 27.7 - 28 billion USD, up 36%, among the countries with the leading growth rate in the world). Agriculture, forestry and fishery have increased quite well; Developing ecological, organic and high-tech agricultural models.

The Government has directed the State Bank to restructure the system of credit institutions in conjunction with handling bad debts. In 8 months, the entire system handled 188.5 trillion VND of bad debts, an increase of 30.7%; actively handled weak credit institutions (mandatory transfer of Vietnam Construction Bank to Foreign Trade Joint Stock Commercial Bank and Ocean Bank to Military Commercial Joint Stock Bank).

In the last 3 months of 2024, the Government strives to achieve and exceed all 15 key targets; maintain momentum, maintain development pace, promote growth associated with maintaining macroeconomic stability, controlling inflation and ensuring major balances; strive for a GDP growth rate of over 7% for the whole year, controlling inflation below 4.5%; credit growth of about 15%; state budget revenue to increase by at least over 10%; public investment disbursement rate of at least 95% of the plan.

Entering 2025, the Government sets the main economic development targets including: GDP growth of about 6.5 - 7% and striving to achieve a higher growth rate (7 - 7.5%); GDP per capita reaching about 4,900 USD; average CPI growth rate of about 4.5%; poverty rate according to multidimensional poverty standards decreasing by about 0.8 - 1%; the proportion of manufacturing and processing industry in GDP reaching about 24.1%; average social labor productivity growth rate of 5.3 - 5.4%; trained labor rate reaching about 70%, of which those with degrees and certificates reaching about 29 - 29.5%; unemployment rate in urban areas below 4%...

Domestic market summary week from October 21 - 25

In the foreign exchange market, during the week of October 21-25, the central exchange rate continued to be adjusted up by the State Bank in most sessions, only slightly decreasing at the end of the week. At the end of October 25, the central exchange rate was listed at 24,255 VND/USD, up 42 VND compared to the previous weekend session.

The State Bank of Vietnam (SBV) continued to list the USD buying rate at 23,400 VND/USD in all sessions. The USD selling rate in the first 3 sessions of the week was listed at 50 VND lower than the ceiling rate, and the last 2 sessions of the week were listed at 25,450 VND/USD.

The interbank USD-VND exchange rate during the week from October 21 to October 25 increased sharply in the first three sessions of the week and then decreased again. At the end of the session on October 25, the interbank exchange rate closed at 25,376, up 216 VND compared to the previous weekend session.

The dollar-dong exchange rate on the free market also increased sharply last week. At the end of the session on October 25, the free exchange rate increased by 440 VND in both buying and selling directions compared to the previous weekend session, trading at 25,700 VND/USD and 25,800 VND/USD.

Interbank money market, week from October 21 to October 25, interbank VND interest rates increased sharply in all terms from 1 month and below. Closing on October 25, interbank VND interest rates were trading around: overnight 3.92% (+1.19 percentage points); 1 week 4.03% (+1.07 percentage points); 2 weeks 4.22% (+0.98 percentage points); 1 month 4.30% (+0.63 percentage points).

Interbank USD interest rates remained little changed during the week across all terms. On October 25, the interbank USD interest rate closed unchanged compared to the previous weekend session across all terms, trading at: overnight 4.83%; 1 week 4.88%; 2 weeks 4.92% and 1 month 4.94%.

In the open market last week, in the mortgage channel, the State Bank of Vietnam bid for a 7-day term with a volume of VND17,000 billion, the interest rate remained at 4.0%. There were VND13,014.57 billion in winning bids, with no maturity volume last week.

The State Bank of Vietnam offered 2 terms of 14-day and 28-day SBV bills for bidding, with interest rates. The 14-day term had 13,400 billion VND in winning bids, with interest rates fluctuating from 3.74% to 3.6%, at 3.7% at the end of the week; the 28-day term had 41,250 billion VND in winning bids, with interest rates at 4.0% at the beginning of the week, at 3.99% at the end of the week.

Thus, the State Bank of Vietnam net withdrew VND41,635.43 billion from the market last week through the open market channel. There were VND13,014.57 billion circulating on the mortgage channel, and VND66,950 billion of State Bank of Vietnam bills circulating on the market.

Bond market, October 23, the State Treasury successfully bid 7,565 billion VND/10,500 billion VND of government bonds called for bid, the winning rate reached 72%. Of which, the 5-year term mobilized the entire 1,500 billion VND called for bid, the 10-year term mobilized 5,620 billion VND/6,000 billion VND called for bid and the 30-year term mobilized 445 billion VND/1,000 billion VND called for bid. The 15-year term called for bid 2,000 billion VND, however, there was no winning volume. The winning interest rates at all terms remained unchanged compared to the previous auction, specifically the 5-year term was 1.89%, the 10-year term was 2.66% and the 30-year term was 3.10%.

This week, on October 30, the State Treasury plans to bid VND11,000 billion in government bonds, of which VND3,000 billion will be offered for 5-year terms, VND6,000 billion for 10-year terms, and VND1,000 billion for 15-year and 30-year terms.

The average value of Outright and Repos transactions in the secondary market last week reached VND14,089 billion/session, a significant increase compared to VND11,203 billion/session of the previous week. Government bond yields last week increased in terms of 5-15 years while decreasing in terms of 30 years and remaining unchanged in terms of the remaining terms. At the end of the session on October 25, government bond yields were trading around 1 year 1.85% (unchanged compared to the session at the end of last week); 2 years 1.86% (unchanged); 3 years 1.88% (unchanged); 5 years 1.91% (+0.01 percentage point); 7 years 2.20% (+0.04 percentage point); 10 years 2.70% (+0.03 percentage point); 15 years 2.89% (+0.03 percentage point); 30 years 3.16% (-0.002 percentage points).

Stock market, week from October 21 to October 25, the stock market was quite negative, all 3 indices were in red. At the end of the session on October 25, VN-Index stood at 1,252.72 points, down 32.74 points (-2.55%) compared to the previous weekend; HNX-Index lost 4.58 points (-2.0%) to 224.63 points; UPCoM-Index fell 0.88 points (-0.95%) to 91.82 points.

Average market liquidity reached about VND16,100 billion/session, down slightly from VND16,600 billion/session the previous week. Foreign investors net sold more than VND1,900 billion on all three exchanges.

International News

The International Monetary Fund (IMF) slightly lowered its outlook for the world economy in 2025. In a report released on October 22, the IMF forecast global GDP in 2024 at 3.2%, a slight deceleration from 3.3% in 2023 and unchanged from its forecast in July. The IMF raised its growth outlook for the US and UK, while lowering its outlook for the Eurozone, Japan and China. Accordingly, the US will grow by about 2.8%; the Eurozone by 0.8%; Japan by 0.3%; the UK by 1.1%, and China by 4.8%.

Entering 2025, the IMF forecasts the world economy to continue to be gloomy with a slowdown in the US and China, and a slight recovery from the Eurozone, UK and Japan. The overall GDP growth remains at 3.2%; of which the US grows 2.2% (+0.3 percentage points compared to the previous forecast), the Eurozone grows 1.2% (-0.3 percentage points); Japan grows 1.1% (+0.1 percentage points); the UK grows 1.5% (unchanged); China grows 4.5% (unchanged, not taking into account the impact of recent economic stimulus policies).

In addition, for the ASEAN-5 including Indonesia, Malaysia, the Philippines, Singapore, and Thailand, the IMF forecasts this group to grow by 4.5% this year and 2025 (+0.1 and -0.1 percentage points, respectively). In terms of inflation, the global consumer price index is forecast to increase by 5.8% this year, then continue to decelerate to 4.3% in 2025. Finally, the IMF warns that geopolitical conflicts and tightening monetary policies in some countries despite cooling inflation will affect the world economy and put pressure on the labor market.

The US economy recorded some notable indicators. First, the S&P Global survey said the US manufacturing PMI index was at 47.8 in October, up from 47.3 in September and also higher than the forecast of 47.5. The services PMI this month reached 55.8, up slightly from 55.2 in the previous month and contrary to the forecast of a slight decrease to 55.0.

US durable goods orders fell 0.8% month-over-month in September, following a 0.8% decline in the previous month and matching forecasts for a 1.1% decline. Year-over-year, orders fell about 3.0%.

In the labor market, the number of initial jobless claims in the US in the week ending October 19 was 227 thousand, down from 242 thousand the previous week and lower than the forecast of 243 thousand. The average number of claims in the most recent 4 weeks was 238.5 thousand, up 2 thousand compared to the average of the previous 4 weeks.

In terms of the real estate market, existing home sales in September reached 738 thousand units, higher than the 709 thousand units in August and surpassing the expectation of 719 thousand units. Finally, the University of Michigan announced that the US consumer confidence index reached 70.5 points in October, slightly adjusted up from the preliminary survey's 68.9 points and higher than the forecast of 69.2 points.

Source: https://thoibaonganhang.vn/diem-lai-thong-tin-kinh-te-tuan-tu-21-2510-157159-157159.html