ANTD.VN - With the economic picture still having many gray areas, the World Bank (WB) believes that Vietnam can consider extending the implementation of the economic support program to next year to support aggregate demand.
According to the WB, November 2023 data continued to show improvement in economic activity.
In line with the trend since April 2023, the monthly seasonally adjusted index of industrial production (IIP) recorded a month-on-month growth rate of 2.7% in November 2023, compared to 2.8% in October 2023. The IIP increased by 5.8% (y/y) in November 2023 compared to 4.4% in October 2023 and was just over half of its pre-pandemic level (average 9.9% in 2018-19).
These expansions reflect relatively resilient domestic consumption and the continued recovery of external demand.
However, the outlook remains dim as Vietnam’s PMI continued to contract in November (47.3 – the lowest since May 2023). S&P Global PMI indicated that new orders fell in November 2023, indicating that demand conditions remain fragile.
At the same time, retail sales growth slowed and remained below pre-pandemic levels. Retail sales (a proxy for domestic consumption) recorded a slight decline of 0.27% in November 2023, following a 1.65% increase recorded in October.
Starting from a deceleration to 5.0% yoy in July 2023, retail sales growth accelerates again but stagnates at an average of around 7.5% yoy in August-November 2023. This growth is much lower than pre-pandemic levels of around 12% yoy.
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Domestic consumption has not fully recovered yet. |
Sales of goods, which account for nearly 80% of total retail sales, were largely unchanged at -0.12% in November 2023 compared with -0.49% in October 2023.
Meanwhile, hotel service sales fell 3.6%, compared with a 4.4% decline in October 2023. Travel services continued to decline at 11.2%, 1.8% lower than a month earlier, reflecting a gradual weakening of domestic tourism .
Merchandise exports and imports continued to improve in response to the recovery in external demand, increasing by 6.7% and 5.1% (y/y), respectively.
However, monthly exports still fell 1.4% in November 2023, compared with a 1.42% increase in October 2023, indicating that the recovery remains quite fragile.
Cumulative exports and imports in the first 11 months of 2023 were still lower than the same period in 2022, down 5.9% and 10.7% respectively.
Cumulative FDI commitments in the first 11 months of 2023 continued to increase, reaching US$28.8 billion, up 14.8% year-on-year, despite global uncertainties, reflecting investors' confidence in Vietnam's economic prospects.
Manufacturing accounted for more than 60% of newly registered and additional capital commitments. Meanwhile, real estate accounted for only 3.5% of registered capital in the 11 months of 2023, compared to 16.7% in the same period in 2022, reflecting the stagnation of the domestic real estate market.
By the end of November 2023, disbursed FDI capital reached 20.3 billion USD, up 2.9% over the same period last year.
Consumer price index (CPI) inflation remained stable at 3.5% (y/y) in November 2023, compared with 3.6% in October 2023, well below the policy target set for 2023 (4.5%).
Budget revenue in the first 11 months of 2023 decreased by 6.2% compared to the same period in 2022, due to the slowdown in domestic and foreign economic activities.
Accumulated revenue from domestic sources (mostly VAT) in the first 11 months of 2023 decreased by 3% over the same period, while revenue from import-export tax decreased by 19.3%...
With the economic picture still full of gray areas, the WB noted that Vietnamese authorities could consider extending the implementation of the economic support program (2022-2023) to next year to allow planned investments to be fully implemented, supporting aggregate demand.
“In the context of the economic downturn, the weaknesses of the financial sector require continued vigilance. At the same time, efforts to restore confidence and promote the healthy development of the real estate market will be key to supporting economic stability in the short term and economic growth in the long term,” the WB noted.
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