Vietnam's economy is recovering significantly.

A recently published analysis report by Dragon Capital assesses that the Vietnamese economy has shown many clear signs of recovery. Growth momentum from both the supply and demand sides continues to improve positively.

Inside an electric vehicle manufacturing plant in Hai Phong . (Source: Getty Image)

Agricultural production and services maintained strong growth momentum. The industrial sector achieved an 11.2% increase in July compared to the same period last year and an 8.5% increase in the first seven months of the year, with manufacturing and processing industries growing by 9.5%. The July PMI reached 54.7 points, marking the fourth consecutive month above 50 points, indicating continued improvement in manufacturing activity.

Furthermore, demand-side growth drivers also showed a positive recovery. Total registered FDI capital in the first seven months of the year exceeded US$18 billion, while disbursed FDI reached approximately US$12.6 billion, representing increases of 10.9% and 8.4% respectively compared to the same period last year. Total retail sales of goods and consumer service revenue increased by 9.4% in July and by 8.7% in the first seven months of the year.

The Consumer Price Index (CPI) in July increased by 0.5% compared to the previous month, corresponding to a 4.4% increase year-on-year. This increase was due to factors such as the low base of the previous year, the increase in the minimum wage, and price adjustments for some goods and services, especially health insurance costs. The CPI for the first seven months of the year increased by 4.12% year-on-year, within the target set by the National Assembly.

In the remaining months of 2024, inflation is expected to adjust slightly downward due to the absence of the low base effect from the previous year, with the average annual inflation rate projected to be around 4% and remain within controllable limits.

Against the backdrop of a weakening US dollar, reflecting expectations that the Federal Reserve (Fed) will cut interest rates in upcoming meetings, and with domestic inflation under control, the State Bank of Vietnam is expected to continue maintaining its loose monetary policy in the near future.

In particular, the State Bank of Vietnam reduced interest rates on open market operations (OMO) and treasury bills by 25 basis points in the first week of August, after raising them twice by a total of 50 basis points since April. According to experts, this is clear evidence of the State Bank's commitment to stabilizing interest rates to support the economy.

Despite recent volatility in global financial markets, Dragon Capital believes that the impact on the Vietnamese economy will not be significant and will only be temporary.

Source: https://baoquocte.vn/dragon-capital-kinh-te-viet-nam-phuc-hoi-ro-ret-283469.html