Vietnam's exports to recover by end of 2023

Inventories in the US and around the world are falling at a fairly rapid pace and the inventory problem is expected to be resolved by the end of this year. The outlook for the manufacturing sector is positive again and orders at factories in Vietnam will recover from the end of 2023.

Mrs. Nguyen Hoai Thu

That is the opinion of Ms. Nguyen Hoai Thu, CEO of VinaCapital Securities and Bond Investment Fund, when talking with the Government Electronic Newspaper.

World inventories are falling rapidly

According to Ms. Nguyen Hoai Thu, the bright spot in Vietnam's economic picture since the beginning of the year is the recovery of tourism, especially the return of international tourists, which has partly supported consumption growth.

Specifically, Vietnam is witnessing a fairly strong recovery in the number of foreign tourists. In the first 5 months of 2023, the number of foreign tourists to Vietnam reached 63% compared to the pre-COVID-19 level, in which the number of Chinese tourists also began to recover, reaching over 18% compared to the pre-COVID-19 level. As a result, real retail sales in the first 5 months of the year (excluding the impact of inflation) increased by 8.3% compared to the same period last year.

Regarding difficulties, the manufacturing sector and export enterprises are under great pressure from the decline in demand for "made in Vietnam" products in the US market and developed countries, leading to a 2.5% decrease in industrial production growth in the first 5 months of 2023, compared to a growth of more than 9% in the same period and an average annual growth of over 10% in the long term. Vietnam's PMI in May also fell to a yearly low of 45.3 due to a decrease in new orders at factories.

"However, when looking at the inventory situation in the US and around the world, we see that inventories in the US are decreasing at a fairly rapid rate. Specifically, inventories of US retailers have increased rapidly and peaked at the end of 2022 with a growth rate of 20% over the same period, and this figure is now decreasing rapidly to 10% and will approach 0% by the end of this year. The inventory problem is expected to be resolved by the end of this year, so we believe that the outlook for the manufacturing sector is gradually becoming positive again and orders at factories in Vietnam will begin to recover from the end of 2023," said Ms. Thu.

The government is determined to handle each bottleneck of the economy.

Regarding the Government's management efforts, Ms. Nguyen Hoai Thu highly appreciated the Government's determination in handling each bottleneck of the economy with the synchronization of monetary and fiscal policies.

Accordingly, to cope with the slowdown in economic growth, the Government has issued many support policies, from stimulating growth through stimulating consumption, removing obstacles in the capital market, bond market as well as real estate market.

The consumer support policies include the State Bank's three interest rate cuts since the beginning of the year to support lending interest rates for individuals and businesses; the policy of reducing VAT from 10% to 8%, which will be applied from July 1; or the Government's recent proposal to the National Assembly regarding extending the visa duration of international visitors to Vietnam to attract tourists...

In supporting businesses and promoting production and business, the Government has passed a series of circulars and decrees, such as: Decree 12 on tax and land rent extension; Decree 08 allowing the principal and interest of corporate bonds to be extended for up to 2 years so that businesses have more time to arrange capital sources to repay debt to bond investors; Circular 03 of the State Bank amending Circular 16 on commercial banks being allowed to buy back corporate bonds sold within 12 months; and Circular 02 on debt repayment period structure and maintaining the debt group for bank loans.

Public investment - a growth driver with much room to grow

Regarding the current difficulties of the Vietnamese economy, Ms. Nguyen Hoai Thu said that it is still a challenge from aggregate demand. When the demand of major trading partners such as the US and Europe is still weak, it causes export activities to slow down. Along with that, the real estate market and the corporate bond market have not recovered, which has also impacted economic activities, and affected domestic demand.

The main drivers of growth in an economy include: Consumption; private investment; public investment spending; and net exports.

Currently, the net export factor is under pressure from the decline in demand from major trading partners. Although it is expected that this demand will recover in the near future, this is an objective factor that is difficult to influence and adjust in the short term.

The recent government policy has been aimed at supporting private consumption and investment. However, these factors are now also directly and indirectly affected by the decline in exports, the adverse impact of the real estate market and the corporate bond market.

"But one driving force that we believe the Government still has room to boost growth is public investment spending. The Government plans to disburse about VND755 trillion in public investment in 2023. If this capital is disbursed effectively, it will actively support boosting the economy's aggregate demand this year, creating a spillover effect to many industries and professions, thereby promoting private investment and consumption," said Ms. Nguyen Hoai Thu.

The CEO of the Securities and Bond Investment Fund believes that the Prime Minister is very determined in directing the disbursement of public investment capital. However, the current backlog and bottlenecks lie in site clearance; administrative procedures; slow construction progress; fluctuations in raw material prices such as gasoline, oil, labor, etc. To overcome these problems, it is hoped that the competent authorities and governments at all levels will be determined in amending the procedures, regulations and handling the above bottlenecks, creating the premise for better disbursement of this capital source in both the medium and long term.

Baochinhphu.vn

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