Review of economic information for the week of May 5-9

Economic information review

Overview

Vietnam's socio-economic situation in April 2025 was relatively stable despite the complicated world context and increased risks due to the US's sudden tax increase policy. Some highlights in the economic picture in the first 4 months of 2025 are:

Agricultural, forestry and fishery production is stable, diseases are under control, and exports are flourishing. Total agricultural, forestry and fishery export turnover in the first four months of 2025 reached 21.15 billion USD, a sharp increase of 10.7% over the same period. Major export groups all recorded growth. Of which, cultivated agricultural products are estimated at 11.6 billion USD, up 11.7%. Aquatic products are estimated at 3.08 billion USD, up 13.7%. Forestry products are estimated at 5.56 billion USD, up 6%. Livestock is estimated at 178.3 million USD, up 16.8%.

Industrial production continued to grow: the industry-wide IIP increased by 1.4% compared to the previous month and by 8.9% over the same period. In the first four months, industrial production increased by 8.4% over the same period (in the same period in 2024, it increased by 6.3%). Of which, the processing and manufacturing industry increased by 10.1% (in the same period in 2024, it increased by 6.5%), contributing 8.5 percentage points to the overall increase. Some key secondary industries increased compared to the same period last year: Motor vehicle production increased by 35.1%; leather and related products production increased by 16.7%; rubber and plastic products production increased by 16.4%; garment production increased by 15.7%; wood processing and production of products from wood, bamboo, rattan, etc. increased by 15.2%.

Total FDI capital as of April 30, 2025, including: Newly registered capital, adjusted registered capital and capital contribution and share purchase value of foreign investors, reached 13.82 billion USD, up 39.9% over the same period. FDI realized in the first 4 months of 2025 is estimated at 6.74 billion USD, up 7.3% over the same period. This is the highest realized FDI capital of four months in the past 5 years. Of which, the manufacturing and processing industry reached 5.5 billion USD, accounting for 81.6%; real estate business reached 533.1 million USD, accounting for 7.9%; production and distribution of electricity, gas, hot water, steam and air conditioning reached 266.2 million USD, accounting for 3.9%.

Total state budget revenue in the first four months of 2025 is estimated at VND944.1 trillion, equivalent to 48.0% of the yearly estimate and up 26.3% over the same period. Of which, domestic revenue reached VND827.2 trillion, equivalent to 49.6% of the estimate and up 29.5% over the same period.

Total retail sales of goods and consumer services revenue at current prices is estimated at VND 2,285.5 trillion, up 9.9% over the same period (same period in 2024 increased by 8.6%), if excluding price factors, it increased by 7.7% (same period in 2024 increased by 5.4%).

Total import-export turnover reached 276.89 billion USD, up 15.7% over the same period, of which exports increased by 13%; imports increased by 18.6%. The trade balance of goods had a surplus of 3.79 billion USD. Most of the key export items grew strongly over the same period, except for the group of phones and components (-1.9% over the same period). Many businesses accelerated production and delivered orders to the US before the US imposed new taxes (July 9, 90 days from April 2), causing strong fluctuations in export figures.

International visitors to Vietnam reached 7.67 million arrivals, up 23.8% over the same period.

The average CPI in the first four months of the year stood at 3.2%, much lower than the Government 's target. Compared to the same period, CPI increased by 3.12%, core CPI increased by 3.05%.

However, the economy still has many limitations. The ability to achieve the 8% growth target is more difficult due to the new US tariff policy and the impact of the organizational arrangement and the construction of a 2-level local government model. The Government believes that production and business activities in many areas are still difficult, access to credit is limited, and traditional growth drivers have not met expectations...

Disbursement of public investment, one of the main drivers of growth, is still very slow. In the first four months of the year, the estimated disbursement of public investment only reached VND128,512.9 billion, equal to 15.5% of the Prime Minister's plan, lower than the same period. Meanwhile, according to the Ministry of Finance, the total public investment capital plan for 2025, including capital according to the Prime Minister's plan, local budget balance capital and capital transferred from previous years, is VND923,030.5 billion.

Regarding solutions to support economic growth in the coming time, the Government emphasized the need to continue to operate monetary and exchange rate policies proactively, flexibly, promptly and effectively; reduce costs, reduce lending interest rates; and enhance access to capital for people and businesses according to Resolution 68 of the Politburo.

In addition, the Government requires strengthening the management of the gold market, preventing, combating and resolutely handling acts of speculation, manipulation, hoarding and smuggling. Strive to increase revenue by at least 15%; thoroughly save regular expenditures to increase development investment expenditures; effectively implement policies on tax, fee, and charge exemption, reduction and extension... In addition, the Government prioritizes promoting growth, renewing traditional growth drivers, promoting new growth drivers, focusing on removing difficulties, promoting real estate market development...

Domestic market summary week from May 5 - 9

In the foreign exchange market during the week of May 5-9, the central exchange rate was generally adjusted by the State Bank in a slightly downward trend. Closing on May 9, the central exchange rate was listed at 24,951 VND/USD, down 5 VND compared to the previous weekend session.

The USD buying price was listed at 23,754 VND/USD, 50 VND higher than the floor rate; while the USD selling price was listed at 26,148 VND/USD, 50 VND lower than the ceiling rate.

The interbank USD-VND exchange rate in the week from May 5 to 9 decreased. At the end of the session on May 9, the interbank exchange rate closed at 25,965 VND/USD, a sharp decrease of 37 VND compared to the session at the end of the previous week.

The exchange rate on the free market last week decreased quite sharply. At the end of the session on May 9, the free exchange rate decreased by 45 VND in both buying and selling directions compared to the previous weekend session, trading at 26,375 VND/USD and 26,475 VND/USD.

In the interbank money market from May 5 to 9, interbank VND interest rates for terms of 1 month or less fluctuated between sessions. Closing on May 9, interbank VND interest rates were: overnight 4.15% (+0.15 percentage points); 1 week 4.30% (+0.1 percentage points); 2 weeks 4.4% (+0.03 percentage points); 1 month 4.52% (-0.02 percentage points).

Interbank USD interest rates fluctuated slightly across all terms last week. On May 9, the interbank USD interest rate traded at: overnight 4.30% (unchanged); 1 week 4.36% (-0.01 percentage point); 2 weeks 4.42% (unchanged) and 1 month 4.46% (-0.02 percentage point).

In the open market last week, in the mortgage channel, the State Bank offered VND150,000 billion for terms of 7 days, 14 days, 35 days and 91 days, with interest rates kept at 4.0%. VND38,544.34 billion was won; VND31,280.06 billion matured last week in the mortgage channel. The State Bank continues not to offer SBV bills.

Thus, the State Bank has injected a net VND7,264.28 billion from the market last week through the open market channel. There are VND76,170.12 billion circulating on the mortgage channel.

On the bond market on May 7, the State Treasury successfully bid for VND1,283 billion/VND10,500 billion of government bonds called for bid, with a winning rate of only 12%. Of which, the 5-year term mobilized VND1,000 billion/VND2,000 billion called for bid, the 10-year term mobilized VND200 billion/VND7,000 billion called for bid, the 15-year term mobilized VND35 billion/VND1,000 billion called for bid and the 30-year term mobilized VND48 billion/VND500 billion. The winning interest rate for the 5-year term was 2.36% (+0.21 percentage point compared to the previous auction), the 10-year was 3.05% (+0.05 percentage point), the 15-year was 3.10% (+0.02 percentage point) and the 30-year was 3.28% (unchanged).

On May 14, the State Treasury plans to bid for VND10,500 billion in government bonds, of which VND2,000 billion will be offered for the 5-year term, VND7,000 billion for the 10-year term, VND1,000 billion for the 15-year term, and VND500 billion for the 30-year term.

The average value of Outright and Repos transactions in the secondary market last week reached VND9,746 billion/session, a sharp decrease compared to VND14,500 billion/session of the previous week. Government bond yields last week increased slightly in most maturities except for the 30-year term. At the end of the session on May 9, government bond yields were trading around 1-year 2.09% (+0.01 percentage point compared to the session at the end of last week); 2-year 2.12% (+0.01 percentage point); 3-year 2.19% (+0.01 percentage point); 5-year 2.44% (+0.02 percentage point); 7-year 2.77% (+0.001 percentage point); 10-year 3.08% (+0.01 percentage point); 15-year 3.22% (+0.01 percentage point); 30 years 3.43% (-0.02 percentage points).

The stock market, last weekend's session recorded a strong recovery, with the VN-Index increasing 41 points (+3.3%), closing at 1,267.3 points.

International news

The US Federal Reserve (Fed) decided not to adjust its policy interest rate and warned of increasing risks to its inflation target and the labor market. At the meeting on May 6-7, the Fed said that the economy generally continued to grow solidly, with first-quarter GDP falling as businesses and households increased imports to avoid new tariffs. The Fed also assessed that the labor market remained strong and inflation "at a high level".

However, the Fed believes that new risks are emerging. The economic outlook is increasingly uncertain, trade policy remains uncertain, and rising inflation and unemployment risks could force the agency to make difficult choices in the coming period.

At this meeting, the Fed decided to keep the policy interest rate at 4.25 - 4.5% and will continue to closely monitor data in the upcoming meetings to make appropriate decisions. Responding to the press after the meeting, Fed Chairman Jerome Powell also affirmed that the current policy stance allows the Fed to respond promptly to economic developments.

The US also recorded a number of important indicators last week. First, the US Institute for Supply Management (ISM) said that the US service sector PMI reached 51.6% in April, higher than the previous month's 50.8%, contrary to the market forecast of a decline to 50.2%.

Next, the US trade balance deficit was 140.5 billion USD in March, larger than the previous month's deficit of 123.2 billion, and also surpassed the forecast deficit of 136.8 billion.

Finally, in the labor market, the number of initial jobless claims in the US for the week ending May 3 was 228 thousand, down 13 thousand from the previous week's 241 thousand, and lower than the forecast of 231 thousand. The average number of claims over the past four weeks was 227 thousand, up 1 thousand from the previous four-week average.

This week, the market awaits the report on the US headline CPI and core CPI for April, which will be released on the evening of May 15, Vietnam time. The headline CPI is forecast to increase 0.3% month-on-month last month, after a slight decrease of 0.1% in March.

The Bank of England (BoE) cut its policy interest rate at its May meeting amid a gloomy economic outlook. At its meeting on May 8, the BoE said that the US's tariff hikes on other countries would put some pressure on UK economic growth but the outlook remained unclear.

Accordingly, this agency does not commit to any roadmap for future policy interest rates and will operate slowly and cautiously. The BoE forecasts inflation in the UK to increase by 3.5% this year, slightly lower than the previous forecast of 3.75%. In addition, economic growth in 2025 is around 1%, also weaker than the previous forecast.

In this meeting, BoE decided to cut policy interest rates by 25 basis points, from 4.5% to 4.25% to support economic growth.

Also on May 8, the UK became the first country to reach a trade agreement with the US since US President Donald Trump announced reciprocal tariffs. Details of the agreement will be released in the coming weeks, including provisions on reducing non-tariff barriers, speeding up customs clearance for US goods, and some provisions related to chemicals and machinery. The US is also expected to maintain the 10% import tax on goods from the UK.

Source: https://thoibaonganhang.vn/diem-lai-thong-tin-kinh-te-tuan-tu-5-95-164008.html